Cassa Depositi e Prestiti SpA, a state-owned Italian bank, and Intesa Sanpaolo, Italy’s largest banking group successfully issued their first digital bond using blockchain technology. The bond was issued via the Polygon blockchain.
First time
The digital bond, valued at €25 million, has a four-month term with a fixed annual coupon rate of 3.633%.
This issuance is part of a larger trial initiated by the European Central Bank to explore ways to settle wholesale fiat money on blockchains.
Payments were made using central bank money through the Bank of Italy’s TIPS Hash Link solution, which connects blockchains with traditional payment systems.
Fabio Massoli, CDP’s director of administration and finance told the project wants to create a new technological model for digital bond issuance while adhering to new legal and regulatory frameworks.
“This transaction represents a significant step for CDP in capital market innovation through the pioneering adoption of blockchain technology for bond issues.”
Progress and development
Global financial institutions and asset managers are more and more interested in tokenizing traditional financial instruments like bonds or stocks.
Many cehhering tokenization as it offers operational benefits such as lower costs, faster transactions, and increased transparency.
For example, BlackRock, the world’s largest asset manager, launched a digital liquidity fund in March to start asset tokenization. This means there is real demand.
New standards
Niccolò Bardoscia, head of digital assets trading and investments at Intesa Sanpaolo, believes that public blockchains are a powerful technology for banks, enabling faster and safer transactions.
„Tokenization is establishing a new standard for efficiency and automation in financial markets. I believe this technological change will impact not only bonds but every asset class over the coming years.”
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