Credit Agricole CIB and SEB launched a digital bond platform. The platform simplifies bond issuance and increases transparency.
Credit Agricole CIB, the corporate and investment banking subsidiary of the Credit Agricole Group, along with SEB, a provider of financial services in northern Europe, have come together to launch a brand new digital bond platform.
In order to increase efficiency and enable real-time data synchronization among participants, the digital bond platform so|bond is attempting to make it possible for issuers in the capital markets to issue digital bonds onto a blockchain network.
The platform will allow issuers to manage securities and raise capital using smart contracts—programmes that automatically carry out, regulate, or record events and activities in accordance with a contract. The platform’s “open, transparent, and secure” design promotes trust among market participants, opening the door for other innovations like the use of a future central bank’s digital currency.
The blockchain network also makes use of the “Proof of Climate awaReness” validation mechanism, which encourages users to leave as little of an environmental footprint as possible.
There is need for development even if “Proof of Stake” methods use substantially less energy than those that employ “Proof of Work.”
The so|bond platform allows energy usage that is equivalent to non-blockchain systems because one of the main obstacles to the general adoption of blockchain technology is its reputation as a very energy-consuming solution. The proof of climate protocol encourages participating nodes to continuously lessen the environmental effect of their infrastructure.
The protocol rewards each node for its work in accordance with a formula tied to its climatic impact assessed with the ISO standard for Life Cycle Assessment: the smaller the node’s environmental imprint, the greater the reward.
Working together to transform breakthroughs into potential market standards
Crédit Agricole CIB is happy to contribute to the developing market for digital assets, according to Romaric Rollet, head of innovation and digital transformation. The strategy for the new securities market and blockchain technology adopted by Our Social Project is tied to its dedication to green and sustainable finance.
This is a significant accomplishment as part of Crédit Agricole CIB’s strategy to accelerate its digital transformation, and we encourage cooperation to help turn ideas into potential market standards that better serve the needs of our clients in a changing regulatory environment.
Anna Sjulander, Head of SSA DCM (Sovereigns, Supranationals and Agencies Debt Capital Markets) at SEB, also spoke about the launch. “The introduction of the digital bond platform is an important step for SEB, as well as for the issuers and investors who join the platform, and will allow us to get insight into what the innovative realm of digital assets imply for the financial services industry,” said Sjulander.
We will use a bond as the first test bed before extending the use of the platform to other asset classes since we see this as a fantastic opportunity to learn what the future holds in terms of transparency, quicker processing, and operational simplifications.