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.

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.”

European Investment Bank Distributes $121 Million in Ethereum-based Digital Bonds

April 29, 2021 Bitcoin.com

Goldman Sachs identifies 19 crypto stocks that massively outperformed the S&P 500

April 28, 2021 Coin Telegraph

bonds

Companies that have made big Bitcoin investments have performed 3X better on average.

Wall Street banking giant Goldman Sachs has identified an emerging cluster of crypto-related stocks that are performing much better than the index itself.

In a note to investors on Tuesday, April 27, analysts at the investment bank highlighted 19 U.S. stocks that had a market capitalization of more than $1 billion and close ties to the cryptocurrency and blockchain industry.

Goldman’s investment gurus stated that many of these stocks have “dramatically outperformed” the broader stock market, with the firms averaging a return of 43% this year, which is more than three times the 13% that the S&P 500 has gained over the same period.

The leading two stocks were crypto mining companies Marathon Digital Holdings and Riot Blockchain with gains of 218% and 151% year to date respectively.

Tesla has also had a solid year with the stock reaching an all-time high of $883 in January a couple of weeks before its announcement it had invested $1.5 billion into Bitcoin. Facebook has also been cited as a big dabbler in the space with plans to launch its own cryptocurrency this year.

Another of Bitcoin’s corporate backers was MicroStrategy, which saw its stock price explode in mid-April just before Bitcoin itself hit an all-time high of $65,000. Goldman estimates that the company has BTC holdings valued at around $4.5 billion.

Jack Dorsey’s payments firm Square has also poured money into crypto assets with a $220 million Bitcoin buying spree. Other payment giants leaning heavily towards crypto include PayPal, MasterCard, and Visa which are all offering some forms of digital asset payments and even trading in some instances.

Goldman analysts noted that two big banks, BNY Mellon and JPMorgan Chase, have spearheaded blockchain adoption through crypto custody and interbank transactions.

The list was rounded out with U.S. exchange Coinbase, exchange operator Overstock.com, blockchain pioneer IBM, microchip maker Nvidia, and financial services firms InvestView, Broadridge Financial, and Ideanomics.

In a note to clients last week, Dan Ives, an analyst at investment firm Wedbush Securities painted the bigger picture:

“The story and theme here is much larger than just investing in Bitcoin and predicting its potential price path… It's about the potential ramifications that crypto, blockchain, and Bitcoin could have across the corporate world for the next decade.”

As reported by Cointelegraph, there have been hundreds of funds making significant investments into the crypto and blockchain industries despite the lack of a U.S. Bitcoin ETF.

Ethereum on a high after European Investment Bank’s $121M digital bond news

April 28, 2021 Coin Telegraph

Ethereum on a high after European Investment Bank’s 1M digital bond news

bonds

ETH prices have cranked 7% over the past 24 hours, outperforming big brother.

Ethereum prices skyrocketed to a new all-time high on Wednesday on the back of positive news from the European Investment Bank.

Ethereum has climbed to $2,709 during early Asian trading on Wednesday, April 28, marking a new peak price for the asset according to Coingecko.

The crypto metrics provider reports a gain of 7% over the past 24 hours, and 15.7% over the past seven days for the world’s second-largest digital asset by market capitalization. The move has pushed the ETH market cap to a record $312 billion.

While there are a range of factors propelling the Ether price, Reuters today attributed it to the news the European Investment Bank is launching a “digital bond” sale using the Ethereum network.

The EIB is issuing a two-year 100 million Euro ($US120.8 million) digital bond, with the sale to be led by Goldman Sachs, Banco Santander, and Societe Generale, according to analysts at Bloomberg.

European Investment Bank is issuing 2 year digital bonds on Ethereum through Goldman, Santander, and Societe.

Wow. @GoldmanSachs #Ethereum @RaoulGMI pic.twitter.com/kaQIrZ9C9V
— Michael Tant (@MichaelTant3) April 27, 2021

On April 23, Societe Generale announced that its subsidiary Societe Generale SFH had issued a 100 million Euro bond as a security token on the public Ethereum blockchain. It was awarded the top triple-A rating by Moody’s and Fitch.

Head of revenue at crypto broker SFOX, Danny Kim, told Reuters that the news has demonstrated a bullish institutional use case for Ethereum, adding that exchange balances are also decreasing adding to the bull case:

“The amount of Ethereum sitting on exchanges continues to drop lower and has been the lowest in the past year. With less supply on exchange available, there's less likely a chance of a major sell-off.”

If you are not extremely long $ETH and Web3 at this point, it will probably be a rough decade for you

Tradfi banks beginning to issue digital bonds on ETH is unbelievable
— Sisyphus (@0xSisyphus) April 27, 2021

As reported by Cointelegraph, a revival in DeFi related protocols and tokens, coupled with a fall in gas prices could also be driving momentum. At the time of writing the average transaction price on the network had fallen to $10.73 according to Bitinfocharts.

Popular crypto analyst ‘Altcoin Sherpa’, meanwhile, predicted that ETH would continue to outperform BTC in the coming weeks, targeting a price of $3,000.

$ETH: Still think this 1 outperforms BTC in the coming weeks, $3000+ is inevitable. Waiting for the BTC bottom to form (wherever that is) and then take off. #Ethereum $ETHUSD pic.twitter.com/wdFUG0Nkui
— Altcoin Sherpa (@AltcoinSherpa) April 28, 2021

European Investment Bank to Issue Digital Bonds on Ethereum: Report

April 27, 2021 The Crypto Briefing

European Investment Bank

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