EIB Debuts its First Blockchain-Backed Digital Green Bond

EIB Debuts its First Blockchain-Backed Digital Green Bond

The European Investment Bank (EIB) has launched its first-ever blockchain-based green bond. The SEK 1 billion ($93m) bond has been issued via the so|bond blockchain platform, a novel creation of Sweden’s SEB and Credit Agricole CIB. This marks the EIB’s fourth digital bond, each of which has been issued on a distinct platform.

The two-year bond has been listed on both the Luxembourg Stock Exchange Securities Official List and the Luxembourg Green Exchange.

The so|bond platform was launched earlier this year and introduced the Proof of Climate awaReness protocol, a unique model designed to incentivize node operators to reduce the carbon footprint of their node. The incentive comes in the form of a token, the Climate awaReness Coin.

Currently, the public permissioned blockchain is managed by node operators Credit Agricole CIB, SEB, and CACEIS, with Credit Agricole CIB also serving as the account keeper for the issuance.

EIB Vice-President Ricardo Mourinho Felix said: “Today marks another ground-breaking milestone for the European Investment Bank as we proudly announce our first-ever green and SEK-denominated bond issued in a blockchain format. This Climate Awareness bond will run on a platform designed to minimize the environmental footprint of the IT infrastructure. We take immense pride in leading the charge towards sustainable finance and technological innovation, with the support of our valuable partners and investors. By combining the power of blockchain with our unwavering commitment to environmental stewardship, we further strengthen our path towards a greener and more sustainable future.”

LuxSE Director Arnaud Delestienne stated that the bond is “the first native digital green bond to be displayed on our Luxembourg Green Exchange platform, adding another successful milestone to our longstanding relationship with EIB.”

The EIB's engagement with digital bonds started more than two years ago when it issued its first €100m digital bond on the public Ethereum blockchain through Societe Generale’s platform. This was followed eighteen months later by another €100 million bond issued on the Goldman Sachs GS DAP permissioned blockchain. In January this year, it employed HSBC’s Orion bond tokenization solution for a £50 million bond. The EIB has had the distinction of being the first user of all four platforms.

EIB's blockchain initiative's funding officer, Xavier Leroy, noted the journey as a significant learning experience, emphasizing the need for more traditional custodians to support digital assets for the sector to gain traction.

The so|bond platform operates on a unique model, providing a new type of blockchain validation logic, the Proof of Climate awaReness (PoCR) protocol. This innovative approach allows for energy consumption on par with non-blockchain systems and encourages participating nodes to continually improve the environmental footprint of their infrastructures.

Tanguy Claquin, Global Head of Sustainability at Crédit Agricole CIB, commented on the launch: “Credit Agricole CIB is a historic partner of EIB in the green bond market through its Climate Awareness Bond (CAB) program, and we are once again happy to bring to market a new CAB, the first European digital green bond, an innovative transaction using a new technology trying to address some of the concerns associated with the perceived environmental impact of the fast-moving field of Digital Ledger Technology.”

As the world steadily moves towards a more sustainable and digitized future, the EIB's blockchain-based green bond marks a significant milestone in the intersection of finance and technology, paving the way for a more eco-conscious financial landscape.