Nikolas Sargeant
CDP, in collaboration with Intesa Sanpaolo, has successfully issued a €25 million digital bond on the Polygon (MATIC) blockchain. This groundbreaking move marks a significant step in the adoption of blockchain technology in traditional finance.
Key details of the bond:
- Value: €25 million
- Duration: 4 months
- Fixed coupon: 3.633% annually
This issuance is part of a broader European Central Bank (ECB) initiative to explore wholesale fiat money settlement on blockchains. The payment was executed using the Bank of Italy's TIPS Hash Link solution, which bridges blockchains and conventional payment systems.
Fabio Massoli, CDP's director of admin and finance, emphasized the importance of this transaction, stating it represents a crucial step in capital market innovation through blockchain technology adoption.
The project aims to establish a new technological model for digital bond issuance, adhering to evolving legal and regulatory frameworks.
Tokenizing Traditional Financial
The move by CDP and Intesa Sanpaolo reflects a growing trend among global financial institutions and asset managers to tokenize traditional financial instruments. This approach offers several benefits:
- Lower costs
- Faster transaction settlements
- Increased transparency
Other notable examples of this trend include BlackRock's launch of a digital liquidity fund in March, marking its entry into asset tokenization.
Niccolò Bardoscia, head of digital assets trading and investments at Intesa Sanpaolo, expressed confidence in public blockchains as a powerful technology for banks to enhance transaction speed and security. He predicted that tokenization would set new standards for efficiency and automation in financial markets, potentially impacting all asset classes in the coming years.
