The European Investment Bank (EIB) has announced that it used Ethereum technology to issue €100 million ($121 million) in two-year digital notes for the first time.
Ether has been trading above $2,700 after it hit a new record high of $2,763 at 11:15 pm WAT on Coindesk on Wednesday, strengthening a case for a continuous bullish run to $3,000 in the short term.
The European Union’s lending arm announced via a press statement that investment banks Goldman Sachs, Banco Santander, and Société Générale will oversee the sale of the bond, which will be governed under French law.
The EIB said the transaction is a series of bond tokens on a blockchain, where investors purchase and pay for the security tokens using traditional fiat.
According to the EIB, benefits from such bond digitalization include reducing fixed costs and costs from intermediaries, improved market transparency, and quicker settlement speed. “These digital bonds will play a role in giving the Bank a quicker and more streamlined access to alternative sources of finance to boost finance for projects across the globe,” EIB vice president Mourinho Félix said in a statement.
This isn’t the first time the Ethereum blockchain has been used in the process of issuing a bond. In April 2019, Societe Generale SFH issued 100 million euros of covered bonds as a security token on the Ethereum blockchain.
The number of banks joining the club for state-backed blockchain bond issuance has been expanding. In September, according to a report by Coindesk, the Bank of Thailand launched a blockchain-enabled platform for the issuance of government saving bonds.