French authorities issue €100 Million in tokenized bonds using blockchain

Thursday, November 7, 2024

France has taken a decisive step towards the tokenization of financial assets: Caisse des Dépôts has just issued 100 million euros worth of bonds on blockchain. This European first, carried out in conjunction with BNP Paribas, Euroclear and other banking heavyweights, could redefine financial standards in Europe.

In the wake of the widespread tokenisation of financial assets, France is positioning its pawns in Europe. This Thursday, Caisse des Dépôts issued 100 million euros worth of 10-year tokenized bonds intended to meet the group's financing needs.

These tokenised bonds were issued via D-FMI, the securities settlement platform of Euroclear, the world's largest player in the field of settlement/delivery. Settlement was handled by DL3S, a type of permissioned blockchain developed by the Banque de France, on which central bank digital currencies (CBDCs) and regulated stablecoins can circulate.

BNP Paribas, the largest bank in the eurozone, acted as issuing and paying agent, while CACIB, Crédit Agricole's corporate and investment bank, and Natixis, Groupe BPCE's corporate and investment bank, acted as dealers.

Another notable point: for the first time, these bonds issued directly on a blockchain comply with French law on bearer securities and have been listed on Euronext, the main European stock exchange.

"The admission of securities to trading, thanks to Euroclear's involvement, solves the problem of lack of liquidity and removes a major bottleneck in this nascent market," explains Frédérick Lacroix, partner at the law firm Clifford Chance who worked on this issuance.

All these players have been brought together by Paris Europlace, an association comprising more than 600 players in the French financial ecosystem, one of whose objectives is to promote Paris as a financial centre.

"The fact that so many leading financial players are joining forces to carry out this type of transaction is very positive for the development of joint collaboration with a view to the tokenisation of financial assets in the future," Stéphanie Lheureux, director of digital assets at Euroclear, tells The Big Whale.

>> Also read - The stablecoin ecosystem 2024 report

Imposing its standard

As the development of decentralised finance (DeFi) and the adoption of cryptocurrencies have continued to accelerate in recent years, monetary authorities have launched major projects to ensure they don't fall behind.

This is part of experiments currently being conducted by the European Central Bank, including a central bank digital currency to be used as a settlement asset, the launch of which is now scarcely in doubt.

In this race, the BdF is among the most advanced central banks on tokenisation topics in Europe and is pushing for a complete overhaul of financial infrastructures, in which its DL3S blockchain would play a central role.

Its adoption would also enable France to impose its standard at European level.

It also remains to be seen what place public blockchains, i.e. those accessible without restriction, such as Ethereum, will take in this major infrastructure change.

At present, they are still largely unusable on a large scale because of a lack of confidentiality, scalability, but also transparency in the formation of transaction fees.

All parameters that for the moment are pushing traditional players to prefer private or permissioned blockchains, as this experiment shows.

This analysis is not investment advice. It has been prepared without taking into account your personal situation, particularly your financial situation, risk profile, and investment objectives.

Before investing in any product, investors should fully understand the risks involved and consult their own legal, tax, financial, and accounting advisors.

Tokens in this article

No items found.

Projects in this article

No items found.

In this category