The European Investment Bank (EIB), which is the European Union’s investment bank being owned by the EU Member States is the largest supranational lender in the world, has recently issued a new type of digital bond built using blockchain technology.
Financial institutions namely Goldman Sachs, which is a leading global investment banking, securities, and investment management firm, Santander, the bank offers an array of financial services and products, and Societe Generale, one of the leading financial services groups and a major player in the economy for over 150 years, associated EIB in working on the digital bond project. The Banque de France is known as an independent institution governed by French and European Law also participated in the program with the EIB.
Being a global leader in the green and subsidiary bond markets, EIP keeps its innovation running to run the projects of issuing digital bonds on a blockchain. EIV Vice President thinks it will pave the way for banks to quickly access alternative sources of finance to boost finance for projects across the globe. It is also thought by the think tank that capital market digitalization will cause benefit to market participants within few years down the road. So a question arises naturally that what is the benefit. The digitalization will bring transparency and faster settlement speed and along with that deduct the third-party cost.
According to EIB, the new digital bond issuance will make things easy for market players to adopt blockchain technology for the issuance of financial securities.
The belief of the Directed-General Finance at the EIB, Bertrand de Mazieres, is it is an achievement to the European lenders. He thinks more blockchain innovation will be inspired because of this for issuing financial securities EIB’s assistance in creating a framework for a new market ecosystem will add value for both issuers and investors.