Brayden Lindrea8 hours ago$520B state-owned Italian bank trials digital bonds on PolygonThe trial was part of an initiative set up by the European Central Bank to identify how blockchains can facilitate central bank money settlement.4825 Total views7 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksItaly’s state-owned bank Cassa Depositi e Prestiti SpA has just completed a $27.2 million digital bond issuance with trillion-dollar investment bank Intesa Sanpaolo using Ethereum layer-2 Polygon.
The transaction was part of a trial conducted by the European Central Bank to identify new solutions for central bank money settlement of wholesale transactions carried out on blockchains, Intesa Sanpaolo explained in a July 18 statement.
It was the first transaction of its kind since Italy introduced its FinTech decree law, which governs the issuance and circulation of financial instruments in digital form.
Cassa Depositi’s $27.2 million (25 million euro) bond will mature over four months — terminating on Nov. 18, 2024 — and offers a fixed coupon at 3.63%, calculated on an annual basis. Intesa Sanpaolo was the sole institutional investor in the trial.Source:Intesa Sanpaolo
The cash flow was settled the same day via the Bank of Italy’s “TIPS Hash Link” tool that allows interoperability between blockchains and traditional payment rails.
“This transaction demonstrates how public blockchains are a powerful technology for financial institutions, making transactions faster and safer,” Niccolò Bardoscia, head of digital assets trading and investments at Intesa Sanpaolo explained in a July 18 LinkedIn post.“This technological change will impact not only bonds but every asset class over the coming years.”Source:Eric Balchunas
Tokenization has also been championed by BlackRock’s CEO Larry Fink, who believes every stock and bond will move on blockchain rails in the future.
Related:Italian central bank backs DeFi tokenization project with Polygon, Fireblocks
Not everyone shares Fink’s views though.
Last month, financial law professor Hilary Allen told the United States Congress that public blockchains are too “fragile” to tokenize trillions of dollars in real-world assets as they’re highly inefficient and can’t handle large transaction volumes.
Meanwhile, Boston Consulting Group forecasts the tokenized asset market could reach $16 trillion by 2030, while fellow consulting firm McKinsey predicted a more modest $2 trillion over the same timeframe.
Over $89 billion of tokenized assets are on blockchain rails, according to data compiled by 21Shares on Dune Analytics.
Polygon sits fourth among blockchains by tokenized value at $40.3 million — trailing only Ethereum, Stellar and Mantle.
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