Italian banks Cassa Depositi e Prestiti SpA (CDP) and Intesa Sanpaolo recently completed a 25 million Euro transaction using blockchain technology. The transaction, which involved Intesa Sanpaolo investing in a bond with a four-month maturity period, took place on the Polygon network, an Ethereum layer 2 blockchain.
In a press release, Intesa Sanpaolo announced that the bond, valued at €25 million, has a fixed coupon at maturity of 3.633% on an annual basis. This successful implementation of blockchain technology in a large-scale transaction marks Italy’s advancement in utilizing decentralized ledger technology (DLT), which is expected to be adopted by other European Union members.
The collaboration between CDP and Intesa Sanpaolo is part of a trial initiated by the European Central Bank (ECB) to explore new solutions for central bank money settlement of wholesale transactions on DLT. This move reflects a broader trend among nations worldwide, especially in the EU, to leverage blockchain for its advantages such as transparency, immutability, and cost-effectiveness in settlements.
Tokenizing financial instruments as real-world assets (RWAs) and conducting transactions over blockchain networks can address the limitations of traditional financial infrastructures. Fabio Massoli, CDP’s Director of Administration, Finance, Control, and Sustainability, emphasized the potential of this approach to create a new market ecosystem and enhance market infrastructure for the benefit of issuers, investors, and other players, including small and medium-sized enterprises (SMEs).
Massimo Mocio, Deputy Chief and Head of Global Banking & Markets, IMI CIB Division of Intesa Sanpaolo, expressed pride in participating in the ECB’s trial program, highlighting the digital expertise within the group and the role of Intesa Sanpaolo in supporting businesses and financial institutions through innovative technological infrastructures.
As blockchain technology continues to gain traction in the financial sector, initiatives like the one undertaken by Italian banks demonstrate the potential for DLT to revolutionize traditional financial systems. The successful completion of a multimillion Euro transaction using blockchain paves the way for further adoption of this technology in the realm of banking and finance, offering new opportunities for growth, efficiency, and security in the market.