- Slovenia has become the first EU country to issue a sovereign digital bond
- It’s valued at 30 million euros ($32.5 million) and carries a 3.65% coupon rate
- They settled on-chain using the Bank of France’s tokenized cash system
Slovenia has become the first EU country to issue a sovereign digital bond valued at 30 million euros with a 3.65% coupon rate.
What Are the Details?
The bonds were settled on-chain using the Bank of France’s tokenized cash system. This issuance is part of the European Central Bank’s (ECB) money settlement experimentation program.
The bonds, which mature on November 25, were settled in wholesale central bank digital currency (CBDC), a digital token designed for use by financial institutions rather than consumers.
This initiative follows the ECB’s initial test of wholesale CBDC settlements, originally conducted by Austria’s central bank. This test focused on the tokenization and settlement of government bonds in the secondary market.
BNP Paribas acted as the global coordinator, sole book-runner, and distributed ledger technology platform operator of Neobonds, a private tokenization platform utilizing Digital Asset’s Daml and leveraging the Canton blockchain.
What Are Slovenia’s Comments?
Slovenia has high hopes for the ECB’s benefits from tokenized settlements.
“These initial transactions and experiments with wholesale tokenized central bank money represent an important stepping stone to greater transparency and efficiency of financial markets with wider technology adoption,” the Slovenian government said.
“While hardly material in financial markets at the moment in terms of value issued and/or traded, we expect the importance of distributed ledger technology to grow significantly in the following years.”
Conclusions
This development reflects a trend initiated by the crypto industry, laying the groundwork for insuring fiat and centralized financial systems, which, despite their flexibility, are increasingly questioned. Every major economy in the world seeks to ensure the stability of its financial system, paying more attention to decentralized technologies and tokenizing its national assets.
For example, regulatory approval of stablecoins by Circle, as you can learn from another article, becomes one of the vectors in this direction, many of which are being developed concurrently. We will continue to closely monitor the adaptation of crypto and financial decentralization in the EU.
