NewsThe European Investment Bank Issued A Digital bond Via...

The European Investment Bank Issued A Digital bond Via Ethereum Blockchain

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The price of Ethereum reached an all-time high on Thursday, reaching $2,774.

Investors made massive investments after the European Investment Bank announced that it had issued its first digital bond on Ethereum’s blockchain in cooperation with Goldman Sachs, Santander Bank, and Societe Generale.

The move was interpreted by the market as a vote of confidence in Ethereum by key financial institutions.

As the EIB states in its communication, the 2-year bond of EUR 100 million can be a guide for the future. The EIB believes that just as with the issuance of green bonds so the new digital bond issue can pave the way for market players to adopt blockchain technology for issuing financial securities.

The EIB believes that the digitization of capital markets may bring benefits to market participants in the coming years, including lower intermediaries and fixed costs, better market transparency through increased capacity to see trade flows and asset owners, and much faster settlement speed.

“This transaction marks the EIB’s first step as a pioneer in the use of blockchain technology for the issuance of financial securities. Helping to create a framework for a new market, the EIB believes that this will bring added value to both issuers and investors while contributing to an innovative, efficient, and secure market infrastructure” commented Bertrand de Mazières, EIB Chief Financial Officer.

What is The EIB

The European Investment Bank (EIB) promotes the objectives of the European Union by providing long-term financing, guarantees, and consulting. It supports projects inside and outside the EU.

Its shareholders are the EU Member States. The EIB is the main shareholder of the European Investment Fund (EIF) and the two institutions make up the EIB Group.

As part of the Commission’s Investment Plan for Europe, the EIB Group is part of a broader strategy aimed at closing the large investment gap by exempting investors from some of the risks posed by projects.

What Exactly is The EIB Doing?

The European Investment Bank borrows money from the capital markets and then disposes of it in the form of loans on favorable terms in projects that contribute to the achievement of the EU’s objectives.

Around 90% of loans are granted within the EU. No part of the money comes from the EU budget.

The EIB provides 3 main types of products and services:

  • Lending: at least 90% of its total financial commitments. The EIB grants loans to clients of all sizes with a view to growth and job creation, and this support often helps attract other investors.
  • Combined resources: means allowing its clients to combine the financing from the M BANK with other investment sources.
  • Advice and technical support: to maximise resource efficiency.

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