In 2021, the European Investment Bank (EIB) announced that it wanted to put bonds on Ethereum (ETH). It was a first, because it was one of the first institutions to want significant effects tokenize. Now the institute has announced that a round two is on its way.
European Union uses Ethereum
The enormous institute wrote this in a letter last Tuesday statement. To be precise, it is a digital bond (also known as ‘bond‘ in English) based on the pound sterling. So far it’s just a test. The value of the debt assets is only 50 million pounds (56 million euros), which is pocket money for the EIB.
The choice of British pounds is remarkable in itself, because the United Kingdom is no longer part of the EU. The European Investment Bank is a government body of the European Union and is therefore separate from the United Kingdom. It is not clear why exactly the EIB opts for bonds denominated in the pound.
The institute is using for the project HSBC’s Orion platform for tokenizing assets. This platform uses Hyperledger Fabric and R3’s Corda as blockchains. These are permissioned blockchains that only large companies have access to, and not public networks that everyone has access to.
However, a spokesman for the institute stated Blockworks that the bond is also issued on Ethereum. This is proof that the security has been put on the blockchain, while at the same time allowing the investors to remain anonymous.
All assets on the blockchain?
According to VisualCapitalist there was a few quadrillion dollars (and euros) in assets in 2022. So only 56 million euros is almost nothing. Yet many institutes are positive. JP Morgan wants to get started with blockchain, and according to Bank of America regulation is the most important step for the next flow of money.
Even Putin wants assets from traditional finance to be on the blockchain in the future. For the time being, regulation is an obstacle, policymakers such as the BIS are still very cautious.