BNP Paribas has successfully arranged and placed the first-ever sovereign digital bond issuance in the Eurozone and EMEA region for the Republic of Slovenia. This landmark transaction, with a nominal size of EUR 30 million and a coupon of 3.65%, is set to mature on November 25, 2024. The issuance utilized the Banque de France’s tokenized cash solution as part of the European Central Bank’s (ECB) wholesale central bank money settlement experimentation program. BNP Paribas served as the Global Coordinator and Sole Bookrunner, while Clifford Chance provided advisory services.
The digital securities were issued using BNP Paribas Global Markets’ private tokenization platform, Neobonds. This platform records the legal ownership of digital bonds and provides an operational framework for issuing, trading, and managing all lifecycle events, including secondary trading. This innovative approach allows for the automatic generation of coupons, enhancing the efficiency and transparency of the bond issuance process.
BNP Paribas plans to continue its involvement in the ECB program, participating in further transactions and experiments to gain comprehensive insights into the three wholesale central bank money (CeBM) settlement solutions provided by Banque de France, Deutsche Bundesbank, and Banca d’Italia. This ongoing participation underscores BNP Paribas’ commitment to leveraging tokenization in wholesale capital markets.
BNP Paribas operates two distinct tokenization platforms: Global Markets Neobonds, built with Digital Asset’s Daml and utilizing the Canton blockchain, and BNP Paribas CIB’s AssetFoundry, an Ethereum-based platform. These infrastructures enable BNP Paribas to adapt to the evolving financial markets driven by Distributed Ledger Technology (DLT).
“BNP Paribas is committed to contributing to the Eurosystem-led wholesale digital settlement solutions that will make bond settlement more efficient and secure. We look forward to issuing more digital bonds with respective central banks’ solutions,” said Frederic Zorzi, Global Head of Primary Markets at BNP Paribas CIB.
Robinson Rouchié, CIO SQI at BNP Paribas Asset Management, added, “The issuance and placement of the first Eurozone sovereign digital bond marks a significant milestone in the financial industry. Our participation underscores our commitment to embracing new technologies and pioneering change within the asset management sector.”
Philippe Maillard, COO of BNP Paribas CIB, highlighted the significance of this transaction: “This transaction marks a significant step forward in the Bank’s digital transformation journey. It was made possible by leveraging the strength of BNP Paribas’ integrated and diversified model across business lines, including Global Markets, ALM Treasury, Securities Services, FIC Official Institutions Coverage, and BNP Paribas Asset Management.”
This historic issuance marks a pivotal moment in the financial industry, demonstrating BNP Paribas’ leadership in digital innovation and its commitment to advancing the use of tokenization in capital markets.
