As a seasoned researcher with a background in finance and technology, I am excited to witness the latest development in Italy’s exploration of blockchain technology for financial transactions. The successful completion of a €25 million bond transaction between Cassa Depositi e Prestiti SpA (CDP) and Intesa Sanpaolo using DLT on the Polygon network is an important milestone, not just for these two institutions but also for the European Union as a whole.
Last Thursday, Cassa Depositi e Prestiti SpA (CDP), a leading Italian public sector bank, and Intesa Sanpaolo, Italy’s biggest lender, executed a 25 million Euro transaction employing blockchain technology. Simultaneously, Intesa Sanpaolo purchased a bond valued at that sum with a maturity of four months. This deal unfolded on the Polygon network, a second-layer blockchain solution based on Ethereum.
As a researcher studying financial news, I came across a press release from Intesa Sanpaolo announcing the issuance of a €25 million bond with a duration of four months and a fixed coupon of 3.633% at maturity, calculated annually. This significant event marks Italy’s pioneering effort in experimenting with decentralized ledger technology (DLT) on a large scale. EU members are anticipated to follow suit.
The announcement mentioned that the deal took place “during the ECB’s trial, where CDP and Intesa Sanpaolo were involved, to explore innovative methods for settling central bank currency transactions in large-scale transactions conducted over distributed ledger technology (DLT).”
Countries worldwide, with a particular focus on those in the EU, are exploring the potential of blockchain technology to unlock its many advantages, such as transparency, immutability, and cost-effective settlements. By converting financial instruments into digital tokens representing real-world assets (RWAs) and facilitating their transactions through blockchain networks, we can address the shortcomings of conventional financial systems.
“Fabio Massoli, CDP’s Administration, Finance, Control and Sustainability director, stated that establishing a modern market system and introducing advanced, productive, and safeguarded market framework will bring benefits to both issuers and investors. This development also offers prospects for other market participants, particularly Small and Medium Enterprises (SMEs),” is one way to paraphrase the original statement.
“Massimo Mocio, Deputy Chief and Head of Global Banking & Markets at Intesa Sanpaolo’s IMI CIB Division, expressed pride in the bank’s participation in the trial programme initiated by the European Central Bank. This involvement showcases the digital proficiency and various skills within our organization. Moreover, Intesa Sanpaolo’s role in markets, assisting businesses and financial institutions, is further emphasized through this collaboration, as well as the adoption of advanced technological frameworks.”
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2024-07-21 14:52