Two banks from Sweden and France have announced the launch of a new digital bond platform based on blockchain technology. The platform will allow institutional clients to issue, trade and settle bonds digitally, providing a more efficient and secure process compared to traditional methods.
The platform, a joint project of Skandinaviska Enskilda Banken (SEB) and Credit Agricole Bank, is called so|bond. According to the announcement on April 3, the blockchain network will be wearing a validation protocol, Climate Awareness Test, minimizing its environmental footprint.
The Proof of Climate Awareness protocol is said to enable power consumption comparable to non-blockchain systems and incentivize participating nodes to improve the environmental footprint of their infrastructures.
Each node will be remunerated according to a formula linked to its climate impact: the lower the environmental footprint, the higher the reward. so|bond would become the first use case for the protocol, developed by France-based IT provider Finaxys.
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Romaric Rolleti, head of innovation and digital transformation at Crรฉdit Agricole CIB, said that the bond blockchain platform was part of a broader plan for the bank's digital transformation:
"The platform's innovative approach to both blockchain infrastructure and the stock market is combined with the strong commitment to green and sustainable finance that is at the core of our Social Project."
The project joins a significant number of other efforts to explore the use of blockchain, smart contracts, and the Internet of Things (IoT) for a global environmental cause. For example, in October 2022, the Bank for International Settlements (BIS), the Hong Kong Monetary Authority and the United Nations Climate Change Global Innovation Center presented the results of their Genesis 2.0 initiative: two prototypes of tokenized green bonds.
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