Key Points: Italy Issued Digital Bond on Polygon Blockchain
Italy’s state-owned development bank, Cassa Depositi e Prestiti (CDP), successfully issued a €25 million digital bond on the Polygon blockchain. This issuance was underwritten by Intesa Sanpaolo as the sole investor, marking a significant milestone in blockchain technology adoption for financial instruments in Europe.
European Central Bank Trials and Fintech Decree
- The digital bond issuance is part of the European Central Bank’s wholesale DLT settlement trials, aimed at testing blockchain technology for financial transaction settlements using central bank money.
- This issuance is the first to utilize Italy’s new ‘Fintech decree’ law, enabling direct securities issuances without central securities depositories. The law requires an authorized Digital Register Manager to maintain a Digital Register, logging securities owners’ details.
- CDP, a majority-owned entity of the Ministry of Economy and Finance, acted as the Market DLT Operator and the authorized Digital Register Manager, showcasing the flexibility of the regulatory framework.
Efficient Settlement and Market Impact
- The digital bond has a four-month term with a fixed annual coupon of 3.63% and was rated by major credit agencies. The transaction was settled on the same day as the issuance, demonstrating the efficiency of blockchain technology.
- Fabio Massoli, CDP’s Director of Administration, Finance, Control, and Sustainability, emphasized the significance of this transaction as a step towards capital market innovation through blockchain technology adoption.
- Intesa Sanpaolo, Italy’s largest bank, played a critical role as the underwriter and sole investor in the digital bond issuance, reflecting the evolving trend towards tokenization of real-world assets in the financial industry.
Future Potential and Technological Impact
- The digital bond issuance aligns with the broader industry trend towards tokenization of assets, where blockchain technology offers operational benefits such as faster settlements, transparency, cost reduction, and increased efficiency.
- Niccolò Bardoscia, head of digital assets trading and investments at Intesa Sanpaolo, highlighted the transformative potential of public blockchains for financial institutions and the establishment of new standards for efficiency and automation in financial markets.
By
By
By
By