EIB to Issue Bonds Using Blockchain Technology

  • The European Investment Bank has hired Goldman Sachs, Banco Santander and Société Générale to look into bonds issued on a blockchain.
  • An initial investor meeting is reportedly set to start on 15 April.
The European Investment Bank in Luxembourg

The European Investment Bank in Luxembourg, 11 May 2012. EIB is a publicly-owned international financial institution, its shareholders are the EU member states. Shutterstock

The European Investment Bank (EIB) is exploring ways to trade, settle and sell digital bonds using blockchain technology, Bloomberg reported on 13 April.

A “person familiar with the matter” told the publication that the EIB — which is owned by European Union member states — has already tasked major global banks Goldman Sachs, Banco Santander and Société Générale with looking into so-called digital bond in euros, which will be issued on a blockchain.

The unnamed source further said the EIB was also planning to use blockchain technology for the registration and settlement of the digital bonds, and that an initial investor meeting was about to start on 15 April, and continue for “some weeks”. The initiative comes just as Europe’s central bank is preparing to decide on whether to explore a central bank issued digital euro.

Europe’s investment bank, however, is not the first to explore the use of blockchain in the issuance of bonds. Last year, the Bank of Thailand partnered with tech giant IBM to launch a blockchain-based government savings bond platform, which the central bank used to sell approximately $1.6 billion worth of saving bonds over one week.

The technology behind popular digital assets Bitcoin and Ethereum, blockchain, has been used in other financial projects. Last month Germany’s central bank successfully tested a new system that allowed those who sell securities on a blockchain to receive their proceeds directly into their bank accounts, without the need of digital currencies.

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