Having issued their first digital bond in April 2021, the European Investment Bank (EIB) is at the forefront of the blockchain technology market. On 31 January 2023, they issued their first ever Sterling-denominated digital bond using a combination of private and public blockchains, raising £50 million.
BNP Paribas acted as joint lead manager in the tokenised bond issuance.
The bond issuance process is using a combination of private and public blockchains operated and accessed via the HSBC Orion Platform, following the recently adopted Luxembourg legal framework tailored to allow for the issuance, transfer and custody of dematerialised securities on Distributed Ledge Technology (DLT) infrastructure.
The dematerialised digital bonds will be held in digital securities accounts kept on HSBC Orion platform, while BNP Paribas’ Securities Services Luxembourg branch – will act as custodian alongside RBC and HSBC for clients investing in the bond.
Aligning with BNP Paribas’ CIB digital strategy, we continue to explore the potential of DLT, namely blockchain technology in fixed-income issuance in a safe manner, looking to deliver operational efficiencies, enhanced security and increased transparency to our clients.
The EIB role as the EU public policy bank, goes beyond being an ordinary bank. We have innovation and disruptive solutions in mind, as demonstrated fifteen years ago with the very first green bond issuance. It is time to innovate the financial sector again, and we are pleased to issue the first digital bond in British pound sterling on a private and public blockchain thanks to the support of our counterparts. This new financial tool will provide additional capital flow that the EIB will invest in projects that make an impact globally.
Ricardo Mourinho Felix, EIB Vice president
After the successful completion of Euro-denominated trades, the EIB is now launching the world’s first ever digital bond denominated in Sterling. This bond is testing the potential of tokenisation on a private ledger for safety and efficiency combined with disclosure on a public ledger for transparency. We are honoured to partner with the EIB in exploring the various use cases for tokenisation in capital markets.
Benjamin de Forton, Debt Capital Markets Sovereign, Supranational & Agencies, EMEA, BNP Paribas
BNP Paribas is pleased to invest in the first EIB digital issuance bond denominated in Sterling, helping to better understand how blockchain-based settlement platforms can be used in liquidity management.
Hervé Cros, Head of Group ALMT Bond Portfolio Management, BNP Paribas
BNP Paribas’ Securities Services business in Luxembourg, alongside RBC and HSBC, connects to HSBCs Orion platform to offer digital custody services. We are able to provide the same level of services for this digital bond as for traditional assets, presenting an official ISIN code in the standard reporting tools of the Bank.
Raphaël Machet, Head of Regulatory Projects and Digital Assets Practice, Securities Services Luxembourg, BNP Paribas