One of the most interesting things I’ve ever seen is occurring right now.
The European Investment Bank (EIB), according to Bloomberg, is selling “Digital Bonds” on the Ethereum blockchain. The EIB is the lending arm of the European Union. They are the biggest multilateral financial institution in the world and one of the largest providers of climate finance. Ethereum is the second largest cryptocurrency blockchain protocol, with only Bitcoin having a larger market capitalization.
This digital bond offering is the first of its kind. Goldman Sachs, Banco Santander, and Societe Generale are underwriting the offering, which consists of €100 million (roughly $121 million) issuance of two-year notes that are set to be priced next Tuesday.
The Ethereum protocol’s unique value-added proposition in the cryptocurrency/decentralized finance space focuses on their “smart contracts” which are embedded in the transactions on their blockchain. The long-term usefulness of these smart contracts are being tagged as revolutionary to the business world as they could save time and expense on any transaction that involves any type of contract between buyers and sellers. For instance, these digitized contracts could streamline the home buying process.
I find it beyond fascinating that the world’s largest multilateral financial institution, with a very large focus on combating climate change, has teamed up with some of the most powerful global investment banks for the first ever digital bond offering through a cryptocurrency protocol.
This is a clear sign that the dawn of a new era in finance is upon us.