Slovenia has become the first European Union member to issue a sovereign digital bond, with a 30 million-euro ($32.5 million) note that was settled on-chain through the Bank of France’s tokenized cash system as part of the European Central Bank’s money settlement experimentation program. The four-month notes, which mature on November 25, carry a coupon rate of 3.65%. The settlement occurred in wholesale central bank digital currency (CBDC) on Thursday, according to the Slovenian government. A wholesale CBDC is a digital token intended for use by financial institutions rather than consumers.
The ECB completed its first test of wholesale CBDC settlement in May and plans to conduct more trials in the coming months. The initial experiment, conducted by Austria’s central bank, focused on the tokenization and simulated delivery-versus-payment settlement of government bonds in secondary market transactions against central bank money, as stated by the ECB.
According to the Slovenian government, “These initial transactions and experiments with wholesale tokenized central bank money represent an important steppingstone to greater transparency and efficiency in financial markets, with wider technology adoption.” While the current financial market impact in terms of issued and traded value is minimal, the government anticipates significant growth in the relevance of distributed ledger technology in the coming years.
BNP Paribas served as the global coordinator and sole bookrunner, as well as the operator of Neobonds, its private tokenization platform built with Digital Asset’s Daml and leveraging the Canton blockchain.
