Paris-based Credit Agricole CIB and SEB have announced the launch of so|bond, a bond issuance platform built using a public blockchain.
The core offering of the new project is its “sustainable and open platform,” placing a premium on environmental sustainability. Traditionally, blockchain has caught significant flak from critics for its high energy consumption rates, but so|bond pushes the frontiers by using a new Proof of Climate awaReness protocol to supposedly improve efficiency.
“The platform’s innovative approach, both to the blockchain infrastructure and to the securities market, is coupled with the strong commitment to green and sustainable finance that is at the centre of our Societal Project,” Romaric Rollet, head of digital transformation at Credit Agricole CIB, said.
On the backend, node operators are incentivized through the project’s native token Climate awaReness Coin, to reduce the carbon footprint of their nodes. Regular audits will be carried out on node operators to ensure compliance with operational standards with environmental footprints being tracked by an ISA-standard Life-Cycle approach.
Similar to other blockchain-based bond issuance platforms, so|bond offers participants the myriad benefits of administration, issuance, and automation through smart contracts.
Furthermore, participants can enjoy the benefits of transparency and security typically associated with distributed ledgers. Experts have pointed out that the platform could foster innovation after the development of central bank digital currencies (CBDCs).
“We see this as a great opportunity to learn what the future entails in terms of transparency, faster processing and operational simplifications, and will use a bond as the first stepping stone before expanding the use of the platform to other asset classes,” SEB Head of SSA DCM Anna Sjulander said.
Spike in blockchain-based bonds
Blockchain-based bond issuances have been rising in popularity in recent months, fuelled by the array of benefits offered to industry players and increasing regulatory clarity. Last week, Euroclear disclosed that it was developing a blockchain-based bond issuance and settlement solution set to be launched before the end of 2023.
Both HSBC and Goldman Sachs have thrown their hats in the ring to develop the blockchain-based bond issuance platform as they plan to catch up with the trio of Santander, ABN, and Societe Generale. In February, Siemens issued a $65 million one-year bond on Polygon, making it the latest firm to launch bonds on publicly distributed ledgers.
“We are proud to be one of the first German companies to have successfully issued a blockchain-based bond,” Siemens CFO Thomas Ralf remarked. “This makes Siemens a pioneer in the ongoing development of digital solutions for the capital and securities markets.”
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