Italian law is utilized for the issuance of a digital bond on the Polygon blockchain by CDP.
In a groundbreaking move, Italy has witnessed the first public blockchain bond settlement with central bank money. The digital bond, issued by CDP, a development bank majority owned by the Ministry of Economy and Finance, was underwritten by Intesa Sanpaolo as the sole investor.
The digital bond issuance is not part of Italy's DLT Pilot Regime, but it complies with the country's 'Fintech decree' law, which applies to DLT issuances not part of the Pilot Regime, given the maintenance of a Digital Register. The Digital Register, required for the issuance, is maintained by a Digital Register Manager authorized by Consob, Italy's securities regulator. However, the digital bond was issued on the Polygon public blockchain, marking a significant step towards blockchain adoption in the financial sector.
The digital bond settlement provides connectivity between a DLT and the TIPS payment system, leveraging the Bank of Italy's TIPS Hash Link solution for the payment. This innovative settlement method is a first in Italy and is part of the European Central Bank's wholesale DLT settlement trials.
Despite not being part of the DLT Pilot Regime, the digital bond is the first to use Italy's DLT Pilot Regime, demonstrating the regime's potential in facilitating blockchain-based financial transactions. The digital bond issuance and settlement process comply with the regulations outlined in the 'Fintech decree' law, ensuring transparency and security in the transaction.
While this article provides an overview of the digital bond issuance and settlement, deeper insights and legislative updates are exclusive to pro subscribers. Stay tuned for more updates on this exciting development in the world of blockchain and finance.
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