Digital Bond
In July 2024, CDP issued its first Digital Bond using blockchain technology (Distributed Ledger Technology – DLT) through the TIPS Hash-Link technical solution developed by Bank of Italy.
The issuance was subscribed by a single institutional investor for a total amount of €25 million.
It was the first issuance in Italy under Decree Law No. 25/2023 (FinTech Decree), which governs the issuance and circulation of financial instruments in digital form with settlement in central bank money. The transaction also contributed to the identification of innovative solutions for the issuance of financial instruments within the framework of the European Central Bank’s initiative, Exploratory Work on New Technologies for Wholesale Central Bank Money Settlement.
The transfer of the bond to the investor and the settlement of the transaction were completed on the same day through CDP’s DLT platform connected to the Bank of Italy's solution.
The CDP Digital Bond smart contract is available on Polygonscan.
Bond Characteristics
Issue Size: 25 million
Currency: EUR
Coupon rate of 3.633% and maturity set for November 18, 2024
Pricing Date: 18 July 2024
Settlement Date: 18 July 2024 (T+0)
Investor Base: Single institutional investor
Security Format: Digital
Cash flows settled on the T2 system via Bank of Italy's TIPS Hash-Link solution
Blockchain Network: Polygon
DLT Registry Manager: Cassa Depositi e Prestiti S.p.A.
Strategic Objectives
- To contribute to the validation of an innovative technological model for the issuance of domestic digital bonds
- To promote financial transactions aligned with Italy’s new regulatory framework governing digital financial instruments based on Distributed Ledger Technology (DLT)
- To settle Digital Bond financial flows through the TIPS Hash-Link solution in central bank money, the safest currency for the settlement of financial transactions.
2020
CDP published a White Paper, in collaboration with IBM and Nexi (formerly SIA), exploring potential applications of blockchain technology in the financial sector.
2023
The FinTech Decree Law (Decree Law No. 25/2023) established the legal framework for the issuance and circulation of digital financial instruments, aligning Italian legislation with the European Pilot Regime Regulation (Regulation (EU) 2022/858).
2024
- CDP submitted an application to CONSOB for inclusion in the register of DLT Registry Managers under the FinTech Decree Law and received approval in April 2024.
- CDP also obtained authorization from the European Central Bank to participate in the second wave of the Exploratory Work on New Technologies for Wholesale Central Bank Money Settlement (July–November 2024).
- On 18 July 2024, CDP successfully completed the issuance of its first Digital Bond under the FinTech Decree Law, with simultaneous settlement of cash flows in central bank money.
