European banks SEB and Credit Agricole have announced the launch of a new digital bond platform called “so | bond” built on blockchain technology. The platform enables institutional clients to issue, trade, and settle bonds digitally, providing a more efficient and secure process than traditional methods. The platform also makes the first use case of a so-called “Proof of Climate” blockchain protocol, which aims to minimize its environmental footprint.
Introducing the “Proof of Climate awaReness” Protocol
The Proof of Climate awaReness protocol will enable an energy consumption comparable to non-blockchain systems while incentivizing participating nodes to improve the environmental footprint of their infrastructures. Each node will be remunerated according to a formula linked to its climate impact, and the lower the environmental footprint, the larger the reward. So | bond is the first use case for the protocol developed by French-based IT provider Finaxys.
Green and Sustainable Finance at the Center of Credit Agricole’s Societal Project
According to Romaric Rolleti, head of innovation and digital transformation at Credit Agricole, the bond blockchain platform is part of a larger plan for the bank’s digital transformation. Rolleti also added that the platform’s innovative approach to the blockchain infrastructure and securities market is coupled with the strong commitment to green and sustainable finance that is at the center of their Societal Project.
Joining the Global Efforts for Environment Causes
The project joins many other efforts to explore the use of blockchain, smart contracts, and the Internet of Things for global environment 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, which included two prototypes of tokenized green bonds.
Conclusion
The launch of the so|bond digital bond platform by SEB and Credit Agricole is a significant step in the use of blockchain technology for sustainable finance. The Proof of Climate awaReness protocol incentivizes participating nodes to improve their environmental footprint, making it an innovative solution that combines digital technology and environmental awareness. With this project, SEB and Credit Agricole have showcased the potential of blockchain technology in providing more efficient, secure, and environmentally friendly solutions for the finance industry.
