Exploring advancements and obstacles in tokenization: Euroclear, EIB, and HSBC delve into the growing adoption of tokenized assets
The Banque de France recently hosted an event focused on the transition towards T+1 settlement in Europe, a move that could revolutionise the financial industry. The discussion covered topics such as tokenisation, distributed ledger technology (DLT), and the need for a wholesale central bank digital currency (CBDC).
One of the key participants in the digital bond market is the European Investment Bank (EIB). Known as the most prolific issuer of digital bonds, the EIB has already issued six digital bonds using five different DLT platforms.
The EIB's foray into digital bond investment was not without its challenges. EIB Director General of Finance, Cyril Rousseau, found the process a painful task. This experience provides valuable insights into what needs to happen for tokenisation to achieve scale.
During last November's ECB wholesale DLT settlement trials, the EIB attempted to become a digital bond investor. One of their investments was in the Slovenian sovereign digital bond, a four-month term bond that the EIB invested in just four days before it was redeemed.
The Slovenian sovereign digital bond was not the only digital bond issued by a national government. However, the current largest issuer of digital covered bonds (Pfandbriefe) in Europe remains unclear from the available search results.
As the digital bond market continues to grow, events like the one hosted by the Banque de France will undoubtedly provide crucial insights and pave the way for a more efficient and streamlined financial system.
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