The European Investment Bank (EIB) has priced its first ever £50 million digital bond.

The digital bond is made possible by using a combination of private and public blockchains operated and accessed via its tokenisation platform, HSBC Orion, the bank said.

The use of an encrypted private blockchain serves as the record of legal ownership of the digital bond and provides an operational framework to manage the floating rate instrument and its lifecycle events.

The public blockchain is used for information purposes and provides increased transparency to investors and the market as to holdings of the digital bonds on an anonymised basis.

The EIB said the dematerialised digital bonds will be held in digital securities accounts kept on HSBC Orion, while the BNP Paribas Securities Services business in Luxembourg, RBC and HSBC will act as custodians for existing clients who invest in this digital bond.

The EIB said the overall intent of digital bonds is to bring benefits to market participants by “reducing costs, improving efficiency and allowing for real-time data synchronisation across participants”.

“The time has come for further innovation in the financial sector, and we are pleased to issue the first digital bond in pound sterling on a private and public blockchain with the support of our counterparts,” said EIB vice president Ricardo Mourinho Felix.

He continued: “This new financial tool will provide additional capital flow that the EIB will invest in projects with global impact.”

The news follows HSBC’s launch of the Orion platform.

At the time, Asif Sherani, managing director, head of DCM Syndicate, EMEA, said: “Tokenisation opens up opportunities for fixed-income issuance, including faster processing and improved operational performance.”

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