The European Investment Bank (EIB) has issued a digital bond based on blockchain and powered by an environmentally incentivized node infrastructure.
A advertisement from the financial institution outlines the key points of a “digital native green bond” denominated in Swedish krona. The 1 billion kroner bond will offer institutional investors a fixed rate of 3.638% over two years.
The Climate Awareness Bond is also being promoted as the first blockchain-based bond to be listed on the Official List of Securities of the Luxembourg Stock Exchange and listed on the Luxembourg Green Stock Exchange.
The bond will run on the recently launched So|bond sustainable blockchain digital bond platform. As Cointelegraph previously reported, the platform enables the issuance, trading, and settlement of digital bonds using pro-environmental incentives for its node operators.
So|bond’s “Proof of Climate awaReness” protocol incentivizes nodes to reduce the environmental impact of their infrastructure. For this, the nodes are remunerated according to a formula linked to their climate impact, so that the lower the impact, the greater the reward.
French IT provider Finaxys has developed the protocol, while So|bond is a joint project of Skandinaviska Enskilda Banken (SEB) and Credit Agricole.
In a statement, EIB Vice President Ricardo Mourinho Felix said that the first-ever krona-denominated green bond aims to leverage blockchain technology to move towards more sustainable financial systems:
“This climate awareness voucher will run on a platform designed to minimize the environmental footprint of IT infrastructure.”
Ben Powell, Head of Sustainable DCM at SEB, added that the adoption of blockchain technology has been “slowed back” by the perception of high energy consumption in recent years. So|bond aims to address the environmental impact of financial infrastructure by using a technology that has often been criticized for its carbon footprint:
“The platform we have built aims to solve this problem by introducing the disclosure of the environmental footprint of network operators.”
Cointelegraph has contacted the EIB for more details about the bond and its potential institutional buyers.
In 2022, the institution settled a €100 million ($103.7 million) digital bond on a private blockchain platform in collaboration with Goldman Sachs and Société Générale Luxembourg.
The EIB has been exploring the use of blockchain-based platforms for digital bonds for the past three years. News of a possible Ethereum-based EIB digital bond issue caused the Ether token (ETH) will reach all-time highs in April 2021.
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