The European Investment Bank (EIB) has successfully priced its inaugural £50 million digital bond, leveraging both private and public blockchains through HSBC’s tokenisation platform, Orion.
This transaction aligns with the recently established Luxembourg legal framework designed to facilitate the issuance, transfer, and custody of dematerialised securities on distributed ledger technology (DLT) infrastructure. The private blockchain will securely record legal ownership of the digital bonds and provide an operational structure to manage the floating-rate instrument and its lifecycle events. Meanwhile, the public blockchain will enhance transparency for investors regarding their holdings of the digital bonds on an anonymised basis.
The dematerialised digital bonds will be maintained in digital securities accounts managed through HSBC Orion. Custodian services will be provided by BNP Paribas Securities Services in Luxembourg, RBC, and HSBC for clients investing in this digital bond.
The architecture, which involves BNP Paribas, HSBC, and RBC Capital Markets, designates HSBC as the central account keeper for recording transactions of the digital bonds.
EIB Vice President Ricardo Mourinho Felix stated, “The time has come for further innovation in the financial sector, and we are pleased to issue the first digital bond in pound sterling on a private and public blockchain with the support of our counterparts. This new financial tool will provide additional capital flow that the EIB will invest in projects with global impact.”
Last year, the EIB issued a €100 million two-year bond utilizing public blockchain technology in partnership with Goldman Sachs, Santander, and Societe Generale.
Benjamin de Forton, from BNP Paribas’ debt capital markets division, noted, “Following the success of euro-denominated trades, the EIB is now launching the world’s first ever digital bond denominated in pound sterling. This bond is exploring the potential of tokenisation on a private ledger for safety and efficiency, while providing transparency through a public ledger.”