ABN Amro’s €5 Million Digital Green Bonds on Polygon

The Dutch bank ABN Amro has issued €5 million worth of digital green bonds using Polygon’s layer 2 Ethereum scaling technology. The green bond was issued as an ERC3643 token via Tokeny, an infrastructure platform that employs Polygon to enable financial institutions to issue and manage securities and financial instruments.

ABN AMRO was able to secure financing of €5 million for the real estate investor Vesteda. According to the bank, Vesteda plans to refinance “green assets” as part of its green finance framework.

Green bonds are a method for raising funds that are invested in sustainable initiatives or businesses with a positive environmental impact. ABN AMRO elaborated on the green bond, which resulted in DekaBank acquiring tokens representing its €5 million investment following payment.

The bank uses Fireblocks to administer the digital bond’s private keys. ABN AMRO has previously investigated the issuance of digital bonds, including the purchase and resale of an EIB digital bond.

Olivier Aartsen, director of debt capital markers at ABN AMRO, stated that the bank intends to support multiple digital bond offerings in the future.

ABN Amro’s digital asset lead, Martijn Siebrand, added that using the E3643 standard enabled the bank to embed compliance rules into digital bonds.

“They can even seamlessly and compliantly interact with other applications on the public network thanks to native interoperability.”

Financial institutions are utilising blockchain technology to issue and manage digital bond offerings for a variety of use cases. In February 2023, Siemens made headlines when it issued a $64 million digital bond that attracted direct investments from DekaBank, DZ Bank, and Union Investment.

In the meantime, in June 2023, the European Investment Bank issued a blockchain-based digital bond that used environmentally conscious node infrastructure.

The 1 billion Swedish krona bond will offer institutional investors a fixed interest rate of 3.638% over two years.

The infrastructure supporting the EIB’s digital bond was created as part of a collaborative effort involving Skandinaviska Enskilda Banken (SEB) and Credit Agricole CIB. So|bon is designed for digital bond issuance, trading, and settlement.