The European Investment Bank (EIB) has released a blockchain-based digital bond powered by an environmentally incentivized node infrastructure.
A announcement The financial institution’s report summarized the key points of the “digital domestic green bond” denominated in Swedish kronor. The 1 billion kroner bond will offer institutional investors a flat rate of 3.638 percent for two years.
The Climate Awareness Bond is also offered as the first blockchain-based bond to be registered on the official securities list of the Luxembourg Stock Exchange and to be displayed on the Luxembourg Green Exchange.
The bond will be traded on the recently launched digital sustainable bond platform So|bond. As Cointelegraph previously reported, the platform enables the issuance, trading and exchange of digital bonds using pro-green incentives for node operators.
So|bond’s “Proof of Climate Awareness” protocol encourages nodes to reduce the environmental impact of their infrastructure. This is done by rewarding nodes based on a formula based on their impact on the climate, and with lower degrees of impact resulting in higher rewards.
The protocol was developed by French IT company Finaxys, while So|bond is a joint project led by Skandinaviska Enskilda Banken (SEB) and Credit Agricole.
EIB Vice-President Ricardo Mourinho Felix said in a statement that the first green, crown-denominated bond aims to leverage blockchain technology to move towards more sustainable financial systems:
“This climate awareness nexus will be driven on a platform designed to minimize the environmental footprint of information infrastructure.”
Ben Powell, head of sustainable DCM at SEB, added that in recent years, adoption of blockchain technology has “pushed back” due to the perception of high energy consumption. So|bond attempts to address the environmental impact of financial infrastructure by using a technology that is typically criticized for its carbon footprint:
“The platform we have developed aims to solve this problem by enabling the disclosure of the environmental footprint of network operators”.
Cointelegraph reached out to the EIB for more details on the bond and its potential institutional buyers.
In 2022, the institution Handled a 100 million euro digital bond On a private blockchain platform ($103.7 million) in partnership with Goldman Sachs and Société Générale Luxembourg.
For the past three years, the EIB has been analyzing the use of blockchain-based platforms for the creation of digital bonds. In April 2021, news of a possible issueEthereum-based EIB digital bond brought ether (ETH) to all-time highs.
Translation of Walter Rizzo