The European Investment Bank (EIB) has introduced a blockchain-based digital bond that utilizes an infrastructure of environmentally incentivized nodes. The bond, denominated in Swedish krona, amounts to 1 billion crowns and offers institutional investors a fixed rate of 3.638 percent over a two -year period. This "digitally native green bond" is notable for being the first blockchain-based bond to be registered on the official list of securities of the Luxembourg Stock Exchange and showcased on the Luxembourg Green Exchange. It will operate on the sustainable blockchain digital bond platform called So|bond.
So|bond, developed as a joint project by Skandinaviska Enskilda Banken (SEB) and Crédit Agricole, facilitates the issuance, trading, and settlement of digital bonds with a focus on environmentally friendly incentives for its node operators. The platform employs the Pro of of Climate Awareness protocol, designed by France-based IT provider Finaxys. This protocol rewards nodes based on a formula tied to their climate impact, where nodes with lower environmental footprints receive higher incentives. The aim of this initiative is to leverage blockchain technology to promote sustainable finance , with the European Investment Bank Deputy President Ricardo Mourinho Felix emphasizing the platform's capability to minimize the environmental footprint of its IT infrastructure.
Ben Powell, head of sustainable DCM at SEB, noted that the perception of high energy consumption has hindered the wider adoption of blockchain technology. In response, So|bond's platform addresses this concern by transparently disclosing the environmental footprint of network operators. This move reflects the commitment to tackle the environmental impact of financial infrastructure while utilizing technology that has faced criticism for its carbon footprint. In a previous partnership, the European Investment Bank collaborated with Goldman Sachs and Société Générale to settling le a €100 million digital bond on a private blockchain platform in 2022.
