Ethereum: EIB bonds arrive!

The  European Investment  Bank (EIB)  also throws itself into the world of  blockchain . Or rather, this is what Bloomberg reports  , citing sources informed of the facts.

One of the most important supranational entities for the issuance of debt securities would be ready, next Tuesday, to debut on the market with a pilot project of  € 100,000,000  of bonds that will be issued in tokenized form on the Ethereum network  . A choice that we share and that could give way to further developments in this field, also by important instructions such as the EIB.

Also participating in the project are banks that are already involved in the world of blockchain such as  Société Générale  and  Santander , accompanied by Goldman Sachs. Good news for ETH too, on the day when it again exceeds its all-time  high . And those who want to take advantage of this listing do not necessarily have to invest in  bonds .

It can also do this by investing in  Ethereum , which we can find in direct access from eToro, a broker that also offers  CopyTrading  (to copy the positions of other traders or to sift through their portfolios) and  CopyPortofolios , which instead allow you to invest in crypto baskets.

What will the EIB propose on the Ethereum network?

€ 100 million of  two-year bonds , which will be the pilot project through which the EIB will test Ethereum networks   for bond marketing. Something that actually two of the three banks involved, Santander and  Société Générale , had already done, even if the latter seems to have recently focused on the networks offered by  Tezos .

It is not yet clear what interest rates will be applied, even if given the short maturity and the denomination in  Euro,  it suggests products with a very low interest rate and with little problems. The most suitable securities for a pilot project and for a small amount of debt placed, at least compared to what is generally offered by EIB placements.

Who is EIB and why is such a move important?

The  European Investment Bank reports  directly to the European Union, which issues debt securities to finance regional development projects, transport, telecommunications, energy infrastructures and also environmental policies.

In addition to the capital it raises with the  bonds , it also operates for shares that refer to each state and also acts as a creditor towards member states.

It is one of the most important financial institutions in Europe and in the world and historically also issues bonds in currencies other than the Euro. Let’s talk, this is the extent of its arrival on the Ethereum blockchain, the most important supranational financial institution after the  International Monetary Fund .

When will the placement take place?

According to Bloomberg, the placement should take place next Tuesday, in the first week of May. The placement will be entrusted to three different banking groups and the security will, before being placed, tokenized on the Ethereum network in the form of non-fungible tokens and issued for denominations of  € 1,000 . The tokens will then be able to circulate freely on the secondary market, by way of a classic bond, with the operations that will be registered on the ETH blockchain.

It is not yet clear what are the ways in which the securities can be traded and how the anonymity and privacy of investors will be preserved. By its very nature, the Ethereum network makes it visible to all exchanges. At the moment it is not possible to obfuscate transactions, given the public and distributed nature of this blockchain.

Great news for Ethereum and more generally for the blockchain world

For years now we have been talking, on these pages, about the possible tokenization of financial securities. We already have an abundance of them in the equity sector via derivatives  (think Binance stock tokens), and we have had experiences in the past, with Santander and Société Generale. However, with the issuance of covered bonds and not of securities that belonged to important institutions such as the EIB.

The blockchain is making many steps forward, even in the institutional world. And the arrival of one of the most important financial institutions in the world is the icing on the cake for a world, that of crypto, which really does not seem to have any limits.

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Wilbert Price

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