EIB – A Non-Profit Based European Investment Bank Develops Digital Bonds Backed By Ethereum

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An investment bank in Europe develops Ethereum based bonds for public buying. The investment bank which is owned by member countries of the European Region issued bonds to the tune of US$ 121 Million.

European Union had established a non-profit-based investment bank named EIB for providing financial support. The bank has informed publicly that it has developed a new product relating to bonds. It was told that crypto-based bonds have been developed which are backed by Ethereum.

EIB told further that in order for the undertaking of the project it partnered with three major financial institutions of the world. These international financial institutions included banks such as Societe Generale, Santander, and Goldman Sachs. The bank which participated in the project voluntarily was Banque de France.

On the day of the announcement i.e. 28th April 2021, EIB revealed that the bank has never strayed from its path of adopting innovation. As the leading financial institution at the international level, the bank is equipped to fulfill the demand of the public with regard to digital bonds.

Vice President of EIB, Mourinho Felix, stated that the successful completion of the digital bond project will ensure the bank’s future goals. He suggested that the bank is fully equipped to meet future demands by providing streamlined access to its clients relating to digital bonds.

EIB is an investment company that is working extensively on the “green finance” initiative. It is in fact considered the leading and pioneer financial institution of the world in terms of supporting green finance. It is the vision of EIB that if capital markets are digitalized then further benefits will be derived by the participants in the long run. The bank explained some of the potential benefits e.g. transparency, efficiency, reduction in third party costs, and expenses.

Meanwhile, a person who is associated with EIB’s bonds projects suggested that there is no coupon on the bonds. However, the bonds would be duly registered after pricing with the blockchain network belonging to Ethereum.

The bank further announced that EIB has successfully introduced risk-free cheaper rates as well as green bonds. Similarly, the bank’s Ethereum bonds will provide more opportunities to market players for becoming a part of this innovative technology called a blockchain. In addition, they can make good use of the blockchain for issuing and developing more financial securities in the future as well.

EIB’s DG Finance, Bertrand de Mazieres, said that with the launch of digital bonds, the bank has earned a reputation in the capital market. He opined that EIB has paved the way for other major financial institutions to issue digitalized securities as well.

EIB now strongly believes that the project will be beneficial for investors as well as issuers at the same time.