Two banks in Sweden and France have announced the launch of a new digital bond platform based on blockchain technology. The platform will enable institutional clients to issue, trade and settle bonds digitally, providing a more efficient and secure process than traditional methods.
The platform is a joint project of Skandinaviska Enskilda Banken (SEB) and Crédit Agricole, called 'so|bond'. According to an April 3 announcement, the blockchain network will use a verification protocol called Proof of Climate Awareness and minimize its environmental footprint. The climate-conscious proof-of-concept protocol is said to enable comparable energy consumption to non-blockchain systems and incentivize participating nodes to improve the environmental footprint of their infrastructure.
Each node will be paid according to a formula related to its climate impact: the lower the environmental footprint, the greater the reward. So|bond will be the first use case for the protocol developed by French IT provider Finaxys.
Romaric Rolleti, head of innovation and digital transformation at Crédit Agricole, said the bond blockchain platform is part of a larger plan for the bank’s digital transformation: "The platform's innovative approach to blockchain infrastructure and securities markets, coupled with a strong commitment to green and sustainable finance, is at the heart of our social projects."
The project joins many other efforts exploring the use of blockchain, smart contracts, and the Internet of Things for global environmental causes. For example, in October 2022, the Bank for International Settlements, the Hong Kong Monetary Authority and the United Nations Global Innovation Center on Climate Change presented the results of their Genesis 2.0 initiative two prototypes of tokenized green bonds.
