April 19, 2024
ABN AMRO Embraces Blockchain for Sustainable Finance
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ABN AMRO Embraces Blockchain for Sustainable Finance

In order to raise €5 million, the Dutch bank ABN Amro conducted a digital green bond offering using layer 2 Ethereum scaling technology from Polygon.

Using Tokeny, an infrastructure system that leverages Polygon to let institutions of finance issue and handle securities and financial instruments, the green bond was launched as an ERC3643 token.

Vesteda, a real estate investor, received €5 million in capital thanks to ABN AMRO. Vesteda seeks to refinance “green assets” as a part of the business’s green finance strategy, the bank claims.

Environmental bonds are a way to raise money for investments in sustainable businesses or initiatives that have a positive influence on the environment.

Additional information on the green bond was provided by ABN AMRO. DekaBank received ownership of tokens signifying its €5 million investment once payment was made. To maintain the digital bond’s private keys, the bank uses Fireblocks.

ABN AMRO has recently looked at the issuance of digital bonds, including buying and reselling an EIB-issued digital bond.

Olivier Aartsen, the bank’s head of debt capital markets, said ABN AMRO intends to support a variety of digital bond offerings in the future.

Martijn Siebrand, the lead for digital assets at ABN Amro, added that the bank was able to incorporate compliance regulations into digital bonds by utilizing the ERC3643 standard.

“They can even seamlessly and compliantly interact with other applications on the public network thanks to native interoperability.”

Martijn Siebrand, the lead for digital assets at ABN Amro

For a variety of use cases, traditional financial institutions are increasingly employing blockchain technology to issue and handle digital bond offers.

When Siemens issued a $64 million digital bond in February 2023, it made headlines and attracted direct investments from DekaBank, DZ Bank, and Union Investment.

In contrast, the European Investment Bank released a novel blockchain-based digital bond in June 2023 that was supported by node infrastructure and environmental incentives. Institutional investors will get the 1 billion Swedish krona bond at a fixed rate of 3.638% for a period of two years.

The technology supporting the EIB’s digital bond was created in a collaborative effort between Credit Agricole CIB and Skandinaviska Enskilda Banken (SEB). Digital bond issuance, trading, and settlement are all intended uses for So|bon.

Image: Freepik

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