European Union Bank Once Again Uses Ethereum in Exploration of Tokenized Bonds

Joshua Ramos
Source: Finbold

Blockworks reported that the European Investment Bank (EIB), a financial arm of the EU, has once again used Ethereum in its exploration into tokenized bonds. The bank utilized the Ethereum blockchain through the deployment of a euro bond back in 2021. Conversely, opting only to use the network for record-keeping this time.

The report noted that the bank is “once again leveraging Ethereum in its quest to tokenized capital markets,” regarding the current EIB endeavor. Furthermore, stating that the bank is issuing the first of its kind digital pound sterling (GBP) on a privatized blockchain.

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EIB Continues Investment in Tokenized Bond

The European Investment Bank is known most as being the primary lender to the European Union. Subsequently, it operates as a public institution that is owned by each of the EU’s 27 member states.

According to the Blockworks report, the bank “deployed the £50 million ($86.6 million) bond to a premissioned network underpinned by HSBC’s tokenization platform, Orion.” Additionally noting the bank’s decisions to utilize a private network to ensure both privacy and efficiency.

Source: European Investment Bank

In a statement from the EIB, they assured the privatized state of the blockchain. Noting, “The encrypted private blockchain serves as the record of legal ownership of the digital bond and provides an operational framework to manage the floating grate instrument and its lifecycle events.”

However, the bank noted the use of public blockchain, for “information purposes,” and to provide “increased transparency to investors,” according to the statement. Conclusively, the EIB remarked, “The pioneering vision of digital bonds intends to bring benefits to market participants by reducing costs, improving efficiency, and allowing for real-time data synchronization across participants.”