Italian public bank Cassa Depositi e Prestiti SpA (CDP) and Italy’s largest lending institution Intesa Sanpaolo executed a transaction worth €25 million last Thursday using blockchain technology, whereby Intesa Sanpaolo invested in an equal amount of bonds with a maturity of four months. The transaction took place on the Polygon network, an Ethereum Layer 2 blockchain.
“The bond, with a face value of 25 million euros, has a maturity period of four months and a fixed coupon at maturity of 3.633% per annum,” reads a press release issued by Intesa Sanpaolo, marking the success of Italy’s large-scale experiment with distributed ledger technology (DLT), which is expected to be adopted by other EU member states.
The press release also noted that the transaction took place “as part of CDP and Intesa Sanpaolo’s participation in a pilot launched by the European Central Bank (ECB) to identify new solutions for central bank settlement of wholesale transactions conducted on DLT.”
Countries across the world, especially in the EU, are looking to leverage the numerous benefits of blockchain like transparency, immutability, low settlement costs etc. Hence, tokenizing financial instruments as real world assets (RWA) and trading them on blockchain networks can bridge the gaps associated with traditional financial infrastructure.
“Fostering a new market ecosystem and introducing an innovative, efficient and secure market infrastructure will create added value for both issuers and investors and open up new opportunities for other players, including SMEs,” said Fabio Massoli, CDP’s Director of Management, Finance, Control and Sustainability.
“We are proud to take part in this pilot programme driven by the ECB, which demonstrates the Group’s digital and other skills and the role Intesa Sanpaolo can play in the market to support companies and financial institutions through new technological infrastructure,” said Massimo Moscio, Deputy Head of IMI CIB and Head of Global Banking & Markets at Intesa Sanpaolo.
