SEB And Crédit Agricole CIB Launch Digital Bond Platform Built on Blockchain Technology
Updated: 4 days ago
SEB and Crédit Agricole CIB are jointly launching so|bond, a “sustainable and open” platform for digital bonds built on blockchain technology. Through the platform, issuers in capital markets will be able to issue digital bonds onto a blockchain network, aiming at improving efficiency and enabling real-time data synchronisation across participants. The blockchain network is using a validation protocol, Proof of Climate awaReness, that encourages its participants to minimise their environmental footprint.
Blockchain technology has the potential to modernise and digitalise the banking and financial services sectors through decentralised and efficient infrastructure. The so|bond platform will enable issuers to raise capital and manage securities through smart contracts, programs that automatically execute, control or document events and actions according to the terms of the contract. The platform’s open, transparent and secure model also fosters trust between market participants and allows further innovations such as using a future central bank digital currency.
New Proof of Climate awaReness protocol
One of the main barriers to the widespread adoption of blockchain technology is that it is often considered as a high energy consuming solution. Although “Proof of Stake” protocols use significantly less energy than those that use “Proof of Work”, there is scope for further improvement. The so|bond platform is built on a new type of blockchain validation logic, the Proof of Climate awaReness protocol. It enables an energy consumption comparable to non-blockchain systems and incentivises participating nodes to continually improve the environmental footprint of their infrastructures. More specifically, each node will be remunerated for its efforts according to a formula linked to its climate impact evaluated with the Life Cycle Assessment ISO standard: the lower the environmental footprint, the larger the reward will be.
The platform and the blockchain technology were developed in collaboration with the IT provider Finaxys. The environmental footprint is measured according to a methodology developed by APL Data Center and applied by SGS, a world-leading certification expert. so|bond is the first use case of this new blockchain technology operating under the Proof of Climate awaReness protocol in global capital markets.
“The launch of the digital bond platform is an important step for SEB, and for the issuers and investors that join the platform, and will allow us to gain insights into what the innovative space of digital assets mean for the financial services industry. We see this as a great opportunity to learn what the future entails in terms of transparency, faster processing and operational simplifications, and will use a bond as the first stepping stone before expanding the use of the platform to other asset classes,” says Anna Sjulander, Head of SSA DCM (sovereigns, supranationals and agencies debt capital markets) at SEB.
“Crédit Agricole CIB is proud to contribute to the emerging market of digital assets. The platform’s innovative approach, both to the blockchain infrastructure and to the securities market, is coupled with the strong commitment to green and sustainable finance that is at the centre of our Societal Project. This is a key achievement, a part of CACIB Digital Transformation Acceleration plan, and we welcome collaboration to convert innovations into possible market standards that better respond to our clients’ needs in an evolving regulatory environment,” says Romaric Rollet, Head of Innovation and Digital Transformation at Crédit Agricole CIB.
The platform is sustainable by its invitation to reduce resources consumption and open to interested parties who want to review, contribute to and participate in the semi-permissioned model.
Source: SEB Group