Crédit Agricole CIB and SEB have announced the launch of so|bond, a sustainable and open digital bond platform powered by blockchain technology. The platform will allow issuers in capital markets to issue digital bonds on a blockchain network, enhancing efficiency and enabling real-time data synchronisation among participants. The blockchain network utilises a unique validation protocol called ‘Proof of Climate awaReness’, which incentivises participants to reduce their environmental footprint.
The so|bond platform will allow issuers to raise capital and manage securities via smart contracts, which automatically execute, control, or document events and actions as per the contract terms. Additionally, the platform’s open, transparent, and secure model fosters trust among market participants and paves the way for future innovations, such as the use of central bank digital currencies.
One of the obstacles to the widespread adoption of blockchain technology is that it is seen as a high-energy-consuming solution. While ‘Proof of Stake’ protocols consume considerably less energy than ‘Proof of Work’ protocols, there is still room for further improvement. The so|bond platform employs the Proof of Climate awaReness protocol, a new type of blockchain validation logic that enables energy consumption comparable to non-blockchain systems and encourages participating nodes to continuously enhance their infrastructures’ environmental footprint.
The platform’s reward system is linked to each node’s climate impact, as assessed by the Life Cycle Assessment ISO standard. The lower the environmental footprint, the greater the reward for the node. Developed in collaboration with IT provider Finaxys, the platform’s environmental footprint measurement methodology was created by APL Data Center and is applied by SGS, a leading certification expert. so|bond is the first instance of this new blockchain technology, operating under the Proof of Climate awaReness protocol, in global capital markets.
Romaric Rollet, Head of Innovation and Digital Transformation at Crédit Agricole CIB, commented: “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 Crédit Agricole CIB 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.”
Anna Sjulander, Head of SSA DCM (sovereigns, supranationals and agencies debt capital markets) at SEB, added: “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.”
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