Italian Banks Conduct First Ever Blockchain-Based Bond Issuance Worth 25 Million Euros

Italian public sector bank Cassa Depositi e Prestiti SpA (CDP) and Intesa Sanpaolo, Italy’s largest lender, conducted a transaction worth 25 million Euros using blockchain technology this past Thursday. With that, Intesa Sanpaolo invested in a bond worth that amount with a four-month maturity period. The transaction happened on the Polygon network, an Ethereum layer 2 blockchain.

A press release issued by Intesa Sanpaolo read, “The bond, with a nominal value of €25 million, has a duration of four months and a fixed coupon at maturity of 3.633%, calculated on an annual basis.” This marks Italy’s successful large-scale experimentation with decentralized ledger technology (DLT), which other EU members are expected to adopt.

The release also read that the transaction occurred “within the context of the participation of CDP and Intesa Sanpaolo in the trial launched by the European Central Bank (ECB) to identify new solutions for central bank money settlement of wholesale transactions for transactions carried out on DLT.”

Nations around the globe, especially in the EU, are trying to harness the blockchain for its numerous benefits, including transparency, immutability, and low costs for settlements. Thus, tokenizing financial instruments as real world assets (RWAs) and transacting them over blockchain networks can fill the gaps associated with traditional financial infrastructures.

“The promotion of a new market ecosystem and the implementation of an innovative, efficient, and secure market infrastructure will provide added value to issuers and investors alike, opening up new opportunities for other players, including SMEs,” said CDP’s Director of Administration, Finance, Control and Sustainability, Fabio Massoli.

“We are also proud to take part in the trial programme promoted by the ECB, demonstrating the digital and other skills present in our Group and the role that Intesa Sanpaolo is called upon to play in the markets, in support of businesses and financial institutions, also through new technological infrastructures,” stated Deputy Chief and Head of Global Banking & Markets, IMI CIB Division of Intesa Sanpaolo, Massimo Mocio.