Goldman Sachs this week launched GS DAP, a new digital assets platform built on private permissioned blockchain technology augmented by a smart contract application layer.
The tokenisation platform will be used to facilitate the issuance, registration, settlement and custody of digital assets, including but not limited to digital bonds. It is jurisdiction-agnostic and can be leveraged across global capital markets.
Yesterday, the European Investment Bank (EIB), in collaboration with Goldman Sachs Bank Europe, Santander and Société Générale, launched Project Venus, its second euro-denominated digitally native bond issue and first using private blockchain technology. The €100 million, two-year bond was issued, recorded and settled on GS DAP, the bank’s first time using a private blockchain.
Last April, EIB issued its first digital bond for €100 million on the public Ethereum blockchain, which was awarded a triple-A rating by Moody’s and Fitch and pushed Ethereum prices up to record highs and a market cap of over $312 billion.
The latest private blockchain transaction paves the way for future on-chain derivative solutions, as it uses the first interest rate swap hedge represented through the industry developed common domain model (CDM).
The new digital bond is also the first syndicated deal settled T+0 and the first cross-chain delivery vs payment (DVP) settlement using an experimental CBDC token, as well as the first digital bond to be executed under Luxembourg law.
““With this new digital bond, EIB is again showing its leadership in capital markets, pushing innovation further by pricing the first syndicated digital bond on a private permissioned chain and settling T+0 across two blockchain networks, and we are excited to take part in this initiative alongside EIB, Banque de France and the Banque centrale du Luxembourg,” said Mathew McDermott, global head of digital assets at Goldman Sachs.
“The transaction also marks the launch of Goldman Sachs’ proprietary Tokenisation Platform – GS DAP, which will… [pave] the way for market players to adopt blockchain technology.”
The bond was settled through an experimental central bank digital currency (CBDC), developed jointly by the central banks of France and Luxembourg.
Initial investors in the EIB bond include AXA IM and Union Investment. “As we continue to experiment with blockchain technology, we welcome the opportunity to invest in this new digital bond by the EIB, this time on a private permissioned network,” said Christoph Hock, head of multi-asset trading at Union Investment.
“The innovative features of this issuance add another page to our learning journey as we expect this technology to be a major part of how capital markets transact in the future. Once again the strength of our internal teamwork, as well as the responsiveness and cooperation with DZ Bank as a depositary, the EIB and Goldman Sachs as platform operator were key in getting us over the line in time.”