ABN Amro issues €5M digital green bond through Polygon-powered Tokeny

September 15, 2023 Coin Telegraph

ABN AMRO

The Dutch bank used Tokeny’s platform to issue and manage digital green bonds operating on Polygon’s layer 2 Ethereum protocol.

Dutch bank ABN Amro has carried out a digital green bond offering that made use of Polygon’s layer 2 Ethereum scaling technology to raise €5 million.

The green bond was issued as a ERC3643 token through Tokeny, an infrastructure platform that uses Polygon to allow financial institutions issue and manage securities and financial instruments.

ABN AMRO was able to secure €5 million in funding for real estate investor Vesteda. According to the bank, Vesteda intends to use the funding to refinance "green assets" as part of the company's green finance framework.

Green bonds are a means to raise funds that are used to invest in projects or companies that are sustainable and affect positive environmental impact.

ABN AMRO laid out further details of the green bond, which saw DekaBank take ownership of tokens representing it's € 5 million investment after payment was made. The bank makes use of Fireblocks to manage private keys to the digital bond.

ABN AMRO has previously explored digital bonds issuance, including purchasing and reselling a digital bond from the European Investment Bank (EIB).

The bank's head of debt capital markers Olivier Aartsen said ABN AMRO aims to support multiple digital bond offerings in the future.

ABN Amro’s digital asset lead Martijn Siebrand added that using the ERC3643 standard allowed the bank to embed compliance rules into digital bonds.

"They can even seamlessly and compliantly interact with other applications on the public network thanks to native interoperability."

Mainstream financial institutions are increasingly making use of blockchain technology to issue and manage digital bond offerings for a number of different use cases.

Siemens grabbed headlines in Feb. 2023 as it launched a $64 million digital bond that drew direct investment from DekaBank, DZ Bank, and Union Investment.

Meanwhile the European Investment Bank issued a unique blockchain-based digital bond in June 2023 powered by environmentally-incentivized node infrastructure. The 1 billion Swedish krona bond is set to offer a 3.638% fixed rate over two years to institutional investors.

The platform underpinning the EIB’s digital bond was developed in a joint project including Skandinaviska Enskilda Banken (SEB) and Credit Agricole CIB. So|bon is intended to be used to issue, trade and settle bonds digitally.

European Investment Bank taps blockchain for Climate Awareness Bond

June 20, 2023 Coin Telegraph

Blockchain

The Swedish krona-based Climate Awareness Bond will be issued on a blockchain that incentivizes node operators to improve environmental footprint of infrastructure.

The European Investment Bank (EIB) has issued a blockchain-based digitial bond powered by environmentally-incentivized node infrastructure.

An announcement from the financial institution outlined the key points of a ‘digital native green bond’ denominated in Swedish krona. The 1 billion kr bond is set to offer a 3.638% fixed rate over two years to institutional investors.

The Climate Awareness Bond is also being touted as the first blockchain-based bond to be registered on the Luxembourg Stock Exchange Securities Official List and displayed on the Luxembourg Green Exchange.

The bond will operate on the recently launched sustainable blockchain digital bond platform So|bond. As Cointelegraph previously reported, the platform allows issuing, trading and settlement of digital bonds using pro-environmental incentives for its node operators.

So|bond’s Proof of Climate awaReness protocol incentivizes nodes to reduce environmental impact of their infrastructure. This is done by remunerating nodes according to a formula linked to their climate impact, with lower impact ratings resulting in higher rewards.

French-based IT provider Finaxys developed the protocol, while So|bond itself is a joint project operated by Skandinaviska Enskilda Banken (SEB) and Credit Agricole CIB.

A statement fromEIB vice-president Ricardo Mourinho Felix said the first-ever green and SEK-denominated bond aims to harness blockchain technology to move towards more sustainable financial systems:

“This Climate Awareness bond will run on a platform designed to minimise the environmental footprint of the IT infrastructure.”

Ben Powell, head of sustainable DCM at SEB, added that blockchain technology adoption has been ‘restrained’ by perceptions of high energy consumption in recent years. So|bond looks to address the environmental impact of financial infrastructure by using technology that has typically been criticized for its carbon footprint:

“The platform we have built aims to address this by introducing a disclosure of the environmental footprint of the operators of the network."

Cointelegraph has reached out to EIB to ascertain finer details of the bond and its prospective institutional buyers.

The EIB has been exploring the use of blockchain-based platforms for digital bonds over the past three years. News of a potential EIB issued Ethereum-based digital bond sent ETH to all-time highs in April 2021.

The institution then settled a euro-denominated 100 million ($103.7 million) digital bond on a private blockchain platform in collaboration with Goldman Sachs and Société Générale Luxembourg.

Industrial Giant Siemens Issues €60 Million Digital Bond on Blockchain

February 16, 2023 Bitcoin.com

Singapore’s DBS Bank launches digital bond security token

June 1, 2021 Coin Telegraph

Coin Telegraph

Institutional or accredited investors signed up to the DBS Digital Exchange will be able to access secondary markets for DBS’s digital bond.

Singapore-based multinational banking corporation, DBS Bank, has launched its first-ever security token offering, or STO, by issuing a digital bond.

The DBS digital bond has been priced at $11.35 million and comes with a six-month tenor and coupon rate of 0.60% annually. The offering was carried out through a private placement hosted by DBS Digital Exchange, or DDEx, marking DDEx’s first STO.

To encourage investor engagement, the bond is set to be traded in board lots of 10,000 Singapore dollars (roughly $7,560) — a dramatic reduction compared to the 250,000 Singapore dollar board lots that traditional wholesale bonds are traded in.

The digital bonds will be available for secondary trading to clients of DDEx who are accredited or institutional investors.

DBS hopes its offering will pave the way for other issuers to launch security token offerings via the DDEx platform.

Eng-Kwok Seat Moey, the Group Head of capital markets at DBS, emphasized that security tokens offer an efficient and innovative method for raising capital in the Asia-Pacific region — which currency represents more than 30% of the global private equity markets. He stated:

“Our maiden STO listing on the DBS Digital Exchange is a significant milestone, as it highlights the strength of our digital asset ecosystem in facilitating new ways of unlocking value for issuers and investors. We expect asset tokenisation to increasingly become more mainstream as more of our clients start to embrace security token issuance as part of their capital fund raising.”

Since launching in December 2020, Moey estimates daily volumes on DDEx have increased by 900%, with the platform now servicing more than 120 traders. DBS’s crypto custody service also holds more than $60 million in assets.

The bank also launched a trust structure offering investment management services for Bitcoin (BTC), Ether (ETH), XRP, and Bitcoin Cash (BCH) speculators in early May.

100M euro digital bond was a CBDC test, says Banque de France

April 30, 2021 Coin Telegraph

Banque De France

European financial institutions are using pilots to make a case for the digital euro.

It turns out the 100 million euro digital bond issued by the European Investment Bank earlier this week was actually a trial of a European central bank-issued digital currency, or CBDC.

An April 28 announcement from France’s central bank, Banque de France, revealed the digital bond was settled using a CBDC on a blockchain.

The two year-bond was issued on the Ethereum public blockchain on April 27 and settled the following day, with a maturity date of April 28, 2023. The sale was led by Goldman Sachs, Santander and Société Générale.

“From a technological standpoint, the experiment required the development and deployment of smart contracts under secured conditions, so that the Banque de France could issue and control the circulation of CBDC tokens and so that CBDC transfer occurred simultaneously with the delivery of securities tokens to the investors’ portfolio,” Banque de France said.

The bank also revealed plans for further experiments in the future, noting that its efforts are part a push to provide evidence of use cases for a European CBDC:

“In the coming months and in cooperation with the market, the Banque de France will conduct additional experimentations to assess other uses of central bank digital currency in interbank settlements.”

The news that the EIB had issued the bond on Ethereum pumped the Ether (ETH) price to $2,709 on Wednesday. Danny Kim, head of revenue at crypto broker SFOX told Reuters the announcement “triggered a bullish institutional use case for Ethereum.”

Despite the bullishness on Ethereum, the wait for a digital euro may still take some time, as the European Central Bank did not participate in the pilot.

In January this year, President of the European Central Bank Christine Lagarde said that the development of a digital euro is "going to take a good chunk of time to make sure it's safe," adding, "I would hope that it's no more than five years.”

On April 12, ConsenSys South Africa lead Monica Singer warned that Europe may be left behind if its too slow to pull the trigger:

“If the central bank in Europe is gonna wait until 2028, by then there won’t be a central bank. Because who’s gonna use the euro in its current form? There are gonna be so many choices.”

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