Slovenia Pioneers EU’s Digital Finance Revolution with First Sovereign Digital Bond
Slovenia has become the first member of the European Union to issue a sovereign digital bond.
The issuance involves a 30 million euro note, worth around $32.5 million, which offers a 3.65% coupon, according to an official announcement from the Slovenian government.
The bond, set to mature on November 25, 2024, was settled on-chain through the Bank of France’s tokenized cash system.
Digital bonds, unlike traditional bonds, leverage blockchain technology to enhance transparency, efficiency, and security in the issuance and trading process.
These bonds represent a shift towards modernizing financial markets by utilizing distributed ledger technology (DLT).
Over the past few years, the adoption of digital bonds has been growing, with notable issuances in various countries.
In 2019, the French bank Société Générale issued a 100 million euro bond as a security token on the Ethereum blockchain.
Likewise, in 2021, Vonovia, one of the leading housing companies in Germany, issued €20 million ($24.3 million) worth of digital bonds on the Stellar Blockchain.
The People’s Bank of China (PBOC) also issued digital bonds on the blockchain in 2021, which were among the first such issuances by a central bank.
More recently, Cassa Depositi e Prestiti SpA (CDP), an Italian state-owned bank, and Intesa Sanpaolo, Italy’s largest banking group, completed the first digital bond issuance on blockchain.
It is worth noting that the European Central Bank (ECB) has been at the forefront of exploring digital finance innovations.
As part of its money settlement experimentation program, the ECB has been testing various wholesale central bank digital currency (CBDC) solutions.
In May, the ECB completed its first test involving Austria’s central bank, which
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