Cassa Depositi e Prestiti Spa (CDP), a state-owned bank, has finished a digital bond issuance valued at $27.2 million with Intesa Sanpaolo, a trillion-dollar investment bank. The bond utilizes the Polygon blockchain and will mature on November 18 – in only four months.
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Intesa Sanpaolo explained that this transaction was part of a trial carried out by the European Central Bank. The trial aimed to identify new ways to settle money for wholesale transactions conducted by the central bank on blockchains.
Cassa Depositi completes digital bond issuance
Intesa Sanpaolo – in qualità di unico investitore istituzionale – ha interamente sottoscritto la prima emissione di @GruppoCDP di un ‘Digital Bond’ su #Blockchain 2: il titolo ha valore pari a €25 milioni, durata di 4 mesi e una cedola annua del 3,633%📌 https://t.co/Fk3UBmA5X4 pic.twitter.com/4pDBV6IQqO
— Intesa Sanpaolo (@intesasanpaolo) July 18, 2024
Italy’s $520B state-owned bank, Cassa Depositi, has confirmed the completion of its $27.2 million digital bond trial. Cassa Depositi partnered with Intesa Sanpaolo, to issue the digital bond utilizing Ethereum layer-2 Polygon.
In a statement released on July 18, Intesa Sanpaolo revealed that the $27.2 million transaction was part of a trial aimed at finding new solutions for money settlement, especially for wholesale transactions carried out on blockchains by the central bank. Intesa Sanpaolo confirmed that the transaction was the first of its kind since the state enacted its Fintech decree. The decree was introduced to regulate the issuance and circulation of all financial instruments in digital versions only.
Intesa Sanpaolo reveals the key details of the digital bond
“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,”
–Niccolò Bardoscia
Intesa Sanpaolo confirmed that it was the only institutional investor in the recently completed trial. The transaction was settled the same day in euros with the help of the “TIPS Harsh Link” tool, which belongs to the Bank of Italy and allows interoperability between traditional payment rails and blockchain. The digital bond offers a fixed coupon of 3.63%, calculated yearly.
On July 18, Niccolò Bardoscia, Intesa Sanpaolo’s head of digital assets trading and investments, said that the transaction shows how public blockchains offer powerful technology for financial entities. Bardoscia revealed that public blockchains make transactions faster and even safer. This technological change is expected to impact bonds and every asset class in the next few years.
Cassa Depositi e Prestiti Spa Bank and Intesa Sanpaolo participated in this initiative as market participants. In addition, Cassa Depositi e Prestiti Spa Bank acted as the market DLT operator. The CDP bank also qualifies as a DLT register manager following its approval by CONSOB, which granted it inclusion on the current list of register managers for digital circulation.
