Source: www.ledgerinsights.com
Goldman Sachs has launched its digital asset tokenization platform, GS DAP, with the issuance of a €100 million ($104 million) digital bond to the European Investment Bank (EIB) on the GS private blockchain. This is the EIB’s second digital bond and, as in the previous bond, Goldman, Santander, Société Générale and Banque de France participated.
The 2-year syndicated bond issue was settled instantly in a delivery-versus-payment transaction using experimental central bank digital currency (CBDC) tokens issued by the Banque de France. The bonus and CBDC tokens live on different blockchains.
Since the bond is issued under Luxembourg law, the Banque centrale du Luxembourg also participated in the bond’s liquidation, and the security is listed on the Luxembourg Stock Exchange. Luxembourg is one of the most digital-equity-friendly jurisdictions in the EU, although France and Germany are also attractive. Next year, the EU DLT Pilot Scheme will begin to enable some level of proof of digital securities across the European Union.
“Blockchain has the potential to disrupt a wide range of sectors. It plays a central role in the success of Europe’s green and digital transitions and strengthens our technological sovereignty,” said EIB Vice-President Ricardo Mourinho Félix.
The key advantages of blockchain, in this case, are the ability to establish faster and operational efficiencies. Lowering the cost of issuance can also make smaller deals more viable. In addition to the efficiencies, once the securities are tokenized, they also present new business opportunities.
Societe Generale Securities Services (SGSS) is the chain custodian with Goldman Sachs Bank Europe SE, Santander and Société Générale as joint lead managers. Investors included AXA IM and Union Investment, who also bought the first EIB digital bond issued in April 2021 on the public Ethereum blockchain.
“With this new digital bond, the EIB once again shows its leadership in the capital markets, further driving innovation by pricing the first syndicated digital bond on a licensed private chain and settling T+0 on two chain networks. blocks,” said Mathew McDermott, global head of Digital Assets at Goldman Sachs.
Goldman Sachs’ DAP platform was developed together with Digital Asset using its DAML smart contract language, and the collaboration was announced just over a year ago. We asked what blockchain technology was used, but did not receive an answer in time for publication.
In this case, the EIB also executed an interest rate swap on the GS DAP platform, using the Common Domain Model, an ISDA standard for derivatives.
This blockchain bond is part of the EIB’s Venus Project, which consists of issuing a series of digital bonds.
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