- ABN Amro has tapped into the power of Polygon’s Tokeny to issue digital green bonds.
- This is evident most financial giants are embracing blockchain innovations to advance their offerings.
Amsterdam-headquartered bank ABN Amro is one the latest financial institutions that has leveraged Polygon’s Layer-2 Ethereum scaling technology. The Dutch Bank registered a digital green bond on the public blockchain and with this bond offering, it raised 5 million euro which is equivalent to $5.3 million. Green bonds are usually used to secure funding for projects, initiatives, or companies that are focused on environmental impact or highly sustainable projects.
Markedly, Tokeny was the platform utilized for issuing the green bond, and the bond was issued as an ERC-3643 token. Tokeny is an infrastructure platform that makes use of the Polygon blockchain to help financial institutions successfully issue and manage securities and financial instruments. Martijn Siebrand, digital asset lead at ABN Amro acknowledged the usefulness and benefit of leveraging the ERC-3643 standard
He mentioned that the ERC-3643 standard allowed the bank to immerse compliance rules into digital bonds. In addition, “they can even seamlessly and compliantly interact with other applications on the public network thanks to native interoperability,” Siebrand explained.
The fund was secured from DekaBank for Vesteda, a real estate investment management service provider located in the Netherlands. ABN Amro confirmed that Vesteda plans to utilize the funding to boost its green finance framework. Precisely, the real estate investor intends to refinance “green assets.”
As part of the deal, DekaBank received tokens which are equivalent to its 5 million euro investment in Vesteda. DekaBank manages the private key to the digital bond by using blockchain security service provider Fireblocks.
Mainstream Financial Institution Indicate Growing Interest in Digital Bonds
This is not ABN Amro’s first foray into digital bond issuance as it had previously explored the sector by involving itself in the purchase and resell of a digital bond from the European Investment Bank (EIB). Speaking about bond issuance, ABN Amro’s head of debt capital markets Olivier Aartsen stated that the Dutch Bank is focused on providing support to several digital bond offerings in the future.
The use of blockchain technology to issue and manage digital bond offerings is fast becoming a trend among mainstream financial service providers. At the beginning of 2023, Siemens, a German engineering and manufacturing company issued its first digital bond which was worth $64 million on the Polygon blockchain. DekaBank was also one of the investors at the time with the likes of DZ Bank and Union Investment taking part.
In June, EIB issued a unique $89.5 million digital bond based on blockchain technology. The bond is designed to offer institutional investors a 3.638% fixed rate over two years. In 2021, Bloomberg hinted at the European Investment Bank’s plans to issue a two-year 100 million euro digital bond on the Ethereum blockchain. Goldman Sachs; Banco Santander and Societe Generale were listed as part of the sale.
During that time, the news caused ETH to reach a new All-Time High (ATH) after gaining as much as 10% to reach $2,675.
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