A unified digital trading platform for bonds will be developed by French and Swedish institutions

The decision to collaborate on a new blockchain technology initiative has been made by two European-based banks. Credit Agricole CIB, a French investment bank, and SEB, a Swedish bank, are the two banks in dispute. They both have a solid reputation for being trustworthy and dependable, and they now aim to create a blockchain-based platform for digital bonds.

The action indicates that European banks may be prepared to utilize the advantages of blockchain technology, at least in part. The goal of the new platform is to provide businesses with a secure environment in which they may issue digital bonds and subsequently obtain finance.

The banks are of the opinion that issuing bonds over a blockchain network will result in increased efficiency and real-time data synchronization. Using smart contracts, consumers would be able to better manage their securities and potentially raise funds.

Even though this is a significant step toward connecting blockchain technology with conventional banking, the two institutions are not the only ones to have taken similar action. Only last week did the Brussels-based Euroclear announce that it would launch a securities trading platform that would also be based on distributed ledger technology. Although Euroclear anticipates the platform to be accessible later in 2023, the precise launch date was not provided. The platform’s name will be Sobond, and it should launch this year, is all that is currently known about it.

How will it operate?

While SEB has its headquarters in Stockholm, Credit Agricole CIB has its headquarters in Paris. The two have chosen to employ a validation methodology called Proof of Climate Awareness with the goal of encouraging users to reduce their carbon impact. As suggested by the protocol, the project as a whole is focused on blockchain, efficiency, and environmental sustainability.

Compared to previous blockchain technologies, the protocol encourages substantially less energy use. The release stated that it will use around the same amount of energy as non-blockchain systems.

According to a formula connected to climate effect, « each node will be compensated for its efforts in accordance with, » it stated. This indicates that the awards will increase as the carbon footprint decreases. According to France’s APL Data Center, the environmental footprint is calculated. Then SGS, a well-known certification specialist, applies it.

It is an impressive accomplishment because this new platform will be the first application of the Proof of Climate Awareness protocol in the world’s capital markets.

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