Euroclear Launches Digital Securities Issuance Service and Settles €100 Million Digital World Bank Bond

Introduction

Euroclear, one of the world's largest securities settlement houses, has taken a significant step towards digitization with the launch of a new digital securities issuance service. As part of its digital infrastructure strategy, Euroclear successfully settled a €100 million digital bond issued by the World Bank's lending arm, the International Bank for Reconstruction and Development.

Embracing Digitization

Euroclear's digital infrastructure, built on R3's Corda blockchain technology, is designed to complement its existing traditional platform for secondary operations. The new service is fully compliant with the European Union's Central Securities Depositories Regulation, ensuring transparency and security for issuers and investors alike. Euroclear's move towards digitization reflects the ongoing transition in capital markets towards digital solutions.

World Bank's Digitally Native Note

The €100 million three-year bond issued by the World Bank, referred to as a "digitally native note," aims to raise funds for sustainable development. The bond was listed on the Luxembourg Stock Exchange and settled under English law. Citi Issuer Services acted as the issuing and paying agent, while TD Securities served as the issuer agent.

A Growing Trend

Euroclear is not alone in embracing digital bonds. The World Bank itself issued the world's first digital bond in 2018, and since then, there has been a steady increase in the issuance of digitalized bonds in various currencies and jurisdictions. The Luxembourg Stock Exchange, for example, registered its first digital bond in June, denominated in Swedish krona. The Tel Aviv Stock Exchange also completed a successful proof-of-concept for tokenizing bonds in June.

Industry-wide Digitization

Euroclear's move towards digital securities issuance comes at a time when other settlement houses are also recognizing the value of digital assets. DTCC, another major settlement house, recently announced its acquisition of digital infrastructure developer Securrency, positioning itself as a leader in unlocking the value of digital assets. The digitization of the capital markets is well underway, and Euroclear's new service represents an important step in this journey.