Italy Completes First Digital Bond Issuance Using Blockchain
According to CoinDesk, Italy's state-owned development bank Cassa Depositi e Prestiti SpA (CDP) and Intesa Sanpaolo, the country's largest lender, have successfully completed a digital bond issuance using blockchain technology. This marks the first transaction under Italy's new digital asset regulations.
The €25 million bond, with a four-month maturity, was issued by CDP on the Ethereum-based Polygon network. Intesa Sanpaolo acted as the underwriter and sole investor. The cash flow was settled in euros on the same day using the Bank of Italy's 'TIPS Hash Link' tool, which facilitates interoperability between blockchains and traditional payment systems.
This issuance is the first under Italy's 'FinTech' decree-law, which regulates the issuance and circulation of digital versions of certain financial instruments. The transaction is part of the European Central Bank's initiative to explore wholesale fiat money settlement on blockchains.
Global banks and asset managers are increasingly looking to tokenize traditional financial instruments such as bonds, credit, and funds on blockchains. This approach aims to achieve operational benefits like faster and more transparent transaction settlements, lower costs, and greater efficiency.
'Public blockchains are a powerful technology for financial institutions, making transactions faster and safer,' said Niccolò Bardoscia, head of digital assets trading and investments at Intesa Sanpaolo. 'Tokenization is establishing a new standard for efficiency and automation in financial markets, and I believe this technological change will impact not only bonds but every asset class over the coming years,' he added.
DYOR before investing !