News
Bank of Italy issues a €25 million digital bond on the Polygon (MATIC) blockchain
Summary
- Cassa Depositi e Prestiti (CDP) has issued a €25 million digital bond on the Polygon blockchain.
- The bond was subscribed by Intesa Sanpaolo as the sole investor.
- This issuance is part of the European Central Bank’s wholesale DLT settlement trials.
- It is the first institution to use the Italian law “Fintech decree”, which allows the direct issuance of securities without central depositories.
- The transaction was settled in central bank money using the Bank of Italy’s TIPS Hash Link solution.
The Italian State Development Bank, Cassa Depositi e Prestiti (CDP), issued a €25 million digital bond on the Polygon blockchain.
This issuance, underwritten by Intesa Sanpaolo as the sole investor, marks an important step in the adoption of blockchain technology for financial instruments in Europe.
The issuance of digital bonds is part of the European Central Bank’s (ECB) wholesale DLT settlement trials. These trials aim to test how blockchain technology can be used to settle financial transactions using central bank money.
In this case, the payment was made using the Bank of Italy’s TIPS Hash Link solution, which connects blockchain networks with the TARGET2 system for wholesale payments.
What makes this issuance particularly noteworthy is that it is the first to utilize the new Italian law “Fintech Decree”. This law, which is the Italian implementation of the DLT pilot regime, allows the issuance of digital securities without the need for central securities depositories or banking intermediaries. Under this law, a digital register must be maintained by an authorized digital register manager to record the details of the security holders.
CDP, which is majority owned from Italy The Ministry of Economy and Finance acted as both the Market DLT Operator and the authorized Digital Register Manager for this issuance. This dual role demonstrates the flexibility of the new regulatory framework in allowing issuers to manage their securities directly on the blockchain.
The digital bond has a maturity of four months and has been rated by major credit rating agencies. It offers a fixed coupon of 3.63% on an annual basis. The settlement of the bond was completed on the same day of issuance, demonstrating the efficiency of blockchain-based transactions.
Fabio Massoli, Director of Administration, Finance, Control and Sustainability of CDP, underlined the importance of this operation:
“This represents a significant step for CDP in capital market innovation through the pioneering adoption of blockchain technology for bond issuances.”
He added that this new market ecosystem could bring added value to both issuers and investors, potentially opening up new opportunities for other market participants, including small and medium-sized enterprises.
Intesa Sanpaolo, Italy’s largest bank with over $1 trillion in assets, played a crucial role in this issuance as the sole underwriter and investor.
Massimo Mocio, Deputy Chief and Head of Global Banking & Markets at Intesa Sanpaolo, said he was proud to be the first in Italy to carry out an operation of this type in the new legislative and regulatory framework.
This digital bond issuance is part of a broader trend in the financial sector toward tokenization of real-world assets. Global banks and asset managers are exploring blockchain technology to achieve operational benefits such as faster and more transparent transaction settlements, lower costs, and greater efficiency.
Niccolò Bardoscia, head of trading and investments in digital assets at Intesa Sanpaolo, highlighted the potential of this technology:
“Public blockchains are a powerful technology for financial institutions, making transactions faster and more secure. Tokenization is setting a new standard for efficiency and automation in financial markets, and I believe this technological shift will impact not only bonds, but every asset class in the coming years.”