Italy’s Cassa Depositi e Prestiti (CDP) has launched a €25 million digital bond on the Polygon blockchain. This issuance, backed by Intesa Sanpaolo, marks a significant development in the use of blockchain technology in Europe for financial assets. This was done under Italy’s new ‘Fintech decree’ law.
Italy Tests Blockchain for ECB Settlements
The digital bond issuance is part of the ECB’s wholesale DLT settlement experiments, which leverage blockchain for settling financial transactions using central bank money. The Bank of Italy used TIPS Hash Link for the payment, enabling blockchain integration with the TARGET2 transfer system.
This issuance marks the first time issuers have employed Italy’s “Fintech decree” law to issue digital securities without central securities depositories or bank intermediaries. Under this law, an authorized Digital Register Manager must keep a Digital Register. CDP was the market DLT operator and digital register keeper.
CDP Launches Digital Bond with 3.63% Coupon
The digital bond has a term of four months and a coupon rate of 3.63% per annum. Major credit rating agencies rated it, and they delivered the bond on the same day as the issuance, showcasing the efficiency of blockchain-based transactions.
Fabio Massoli, CDP’s Director of Administration, Finance, Control, and Sustainability, explained the importance of this transaction. He pointed out that this is a big step for CDP in capital market innovation using blockchain technology. This new market ecosystem could favor issuers and investors with new opportunities for small and medium-sized enterprises.
Italy Embraces Blockchain for Secure Financial Transactions
Intesa Sanpaolo, the largest bank in Italy, was the underwriter and the sole investor in the deal. Massimo Mocio, the deputy chief and Head of Global Banking and Markets at Intesa Sanpaolo, stated that this operation is unique and in line with the new legal and regulatory environment.
Niccolò Bardoscia, the head of digital assets trading and investments at Intesa Sanpaolo, spoke about the possibilities of blockchain. He said that public blockchains are effective for financial institutions, enabling faster and more secure transactions. Tokenization is emerging as a new paradigm of efficiency and automation in the financial markets.
This digital bond issuance is an example of a growing trend of tokenizing real-world assets. Global banks and asset managers are enhancing their operations by using blockchain technology. They speed up transaction processing, increase transparency, reduce costs, and improve efficiency.
