What Happened: Ethereum reached a new all-time high of $2,675 on Tuesday, gaining nearly 10% overnight and pushing its market cap past $307 billion.
Just as the second-largest cryptocurrency set a new price record, the European Investment Bank (EIB) announced plans to offer a two-year digital bond on the Ethereum blockchain.
According to Bloomberg, EIB plans to price 100 million euros ($121 million) of two-year notes in an inaugural sale of these digital bonds. The notes will reportedly be registered on the public Ethereum blockchain network using distributed ledger technology and will be priced on Tuesday.
EIB has also mandated Goldman Sachs Group Inc (NYSE:GS), Banco Santander SA (BME: SA), and Societe Generale SA (EPA: GLE) as the joint-lead managers for its inaugural sale.
Why It Matters: This isn’t the first time the Ethereum blockchain has been used in the process of issuing a bond. In April 2019, Societe Generale SFH issued 100 million euros of covered bonds as a security token on the Ethereum blockchain.
“This live transaction explores a more efficient process for bond issuances. It proposes a new standard for issuances and secondary market bond trading and reduces cost and the number of intermediaries.”, stated the bank in a press release.
With the European Union’s investment arm issuing debt on Ethereum, market proponents viewed the development as a bullish catalyst for the network.
In the eyes of the Ethereum community, including global macro investor Raoul Pal, the move was an acknowledgment of Ethereum as a legitimate financial infrastructure.
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