SEB and Credit Agricole Bank have joined forces to launch a digital bond platform built on blockchain technology. The platform, named so|bond, will allow institutional clients to issue, trade and settle bonds digitally, providing a more efficient and secure process than traditional methods. This innovative approach to the blockchain infrastructure and securities market has a strong commitment to green and sustainable finance that is at the center of the Societal Project.
According to the announcement made on April 3, the blockchain network will be using a validation protocol, “Proof of Climate awaReness,” that will minimize the platform’s environmental footprint. Each node will be remunerated according to a formula linked to its climate impact: the lower the environmental footprint, the larger the reward. So|bond would become the first use case for the protocol developed by the French-based IT provider Finaxys.
Romaric Rolleti, head of innovation and digital transformation at Credit Agricole, stated that the bond blockchain platform was part of a larger plan for the bank’s digital transformation, adding that “The platform’s innovative approach, both to the blockchain infrastructure and to the securities market, is coupled with the strong commitment to green and sustainable finance that is at the center of our Societal Project.”
This joint project between SEB and Credit Agricole Bank comes as many other financial institutions are exploring the use of blockchain, smart contracts, and the Internet of Things for global environmental causes. In October 2022, the Bank for International Settlements, the Hong Kong Monetary Authority, and the United Nations Climate Change Global Innovation Hub presented the results of their Genesis 2.0 initiative — two prototypes of tokenized green bonds.
The digitization of the bond market could have far-reaching consequences for the financial industry, enabling it to become more accessible and transparent, while improving efficiency and security. Furthermore, the use of blockchain technology, coupled with the Proof of Climate awareness protocol, could lead to a more sustainable and eco-friendly approach to the issuance, trading, and settlement of bonds. By leveraging blockchain technology and implementing a sustainable approach, the financial industry can become more efficient, transparent, and eco-friendly. This innovation could pave the way for further adoption of blockchain technology in the financial industry and beyond, as companies seek to implement sustainable solutions in their operations.