Slovenia makes history as first EU Country to issue Sovereign Digital Bond on Canton Blockchain

Slovenia has made history as the first member of the European Union (EU) to issue its inaugural sovereign digital bond.

Using the Banque de France's (BdF) tokenized cash solution, which is part of the European Central Bank's (ECB) wholesale central bank money (CeBM) settlement experimentation program, BNP Paribas arranged and placed the first-ever sovereign digital bond issuance for the Eurozone and EMEA, the Republic of Slovenia, with on-chain settlement on July 25, 2024. For this deal, Clifford Chance served as advisor and BNP Paribas as the global coordinator and sole bookrunner.

As per the official announcement from the Republic of Slovenia Government, the digital securities with a nominal size of 30 million euro note, a coupon of 3.65%, and a final maturity date of November 25, 2024 were issued by the Republic of Slovenia using Neobonds.

Neobonds, a private tokenization platform from BNP Paribas Global Markets, provides an operational framework for the issuance and trading of digital bonds, automatically generates coupons, and supports all lifecycle events, including secondary trading.

Up until the conclusion of the ECB program, BNP Paribas will continue to take part in actual transactions and experiments in order to fully comprehend the three wholesale CeBM settlement options offered by the Banque de France, Deutsche Bundesbank, and Banca d'Italia. With this involvement, BNP Paribas is taking a step closer to using tokenization in wholesale capital markets, the post added.

Using Digital Asset's Daml and the Canton blockchain, BNP Paribas runs two tokenization platforms: Global Markets Neobonds and BNP Paribas CIB's Ethereum-based AssetFoundry. Utilizing the primary blockchain technologies, these infrastructures enable BNP Paribas to adjust to the development of the financial markets on Distributed Ledger Technology (DLT).

Frederic Zorzi, the Global Head of Primary Markets at BNP Paribas CIB, said bond settlement will become more secure and efficient with the help of BNP Paribas' contribution to the Eurosystem-led wholesale digital settlement solutions. We anticipate issuing additional digital bonds in conjunction with the responses from the relevant central banks, the post added.

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