European Investment Bank (EIB) issues second €100 million digital bond in a week with the help of central bank digital currency (CBDC)
The European Investment Bank (EIB) has made history by issuing its sixth digital bond last week, using Banque de France's 'exploratory cash tokens' or wholesale Central Bank Digital Currency (CBDC) for settlement. This significant move was part of the Eurosystem’s wholesale digital settlement trials.
The €100 million digital bond, issued just a few days after the bank's fifth digital bond, was one of five digital bonds issued by the EIB in recent times. It was also part of the European Central Bank's (ECB's) wholesale DLT settlement trials in central bank money, and it settled atomically using delivery versus payment.
The ECB's exploration of cash tokens or wholesale CBDC for digital settlement is a crucial step towards the future of financial transactions. The Banque de France's DL3S blockchain platform, the only one of the three ECB DLT settlement options that provides cash on chain, was instrumental in the success of this digital bond issuance.
The trials of the ECB's wholesale DLT settlement in central bank money are set to conclude this month. The sixth digital bond issued by the EIB was settled before these trials come to an end, marking a milestone in the development and acceptance of digital bonds in the financial industry.
This latest digital bond issuance by the EIB in September 2024 further cements the bank's position as a pioneer in the digital bond market. As the Eurosystem continues to explore the potential of digital settlement, we can expect to see more innovative developments in the near future.
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