Italy’s state-owned development bank Cassa Depositi e Prestiti SpA (CDP) and Intesa Sanpaolo, the largest lender in the country with over $1 trillion of assets, completed a digital bond issuance using blockchain rails on Thursday, the first such transaction under the country’s new digital asset rules.

The €25 million bond with a four-month maturity was issued by CDP on the Ethereum-based Polygon (MATIC) network, with Intesa Sanpaolo being the underwriter and sole investor, according to a press release. The cash flow was settled in euros on the same day (T+0) using the Bank of Italy’s “TIPS Hash Link” tool that allows interoperability between blockchains and traditional payment rails.

The transaction was the first digital bond issuance under the country’s so-called “FinTech” decree-law, which governs the issuance and circulation of digital versions of certain financial instruments, the banks said.

The issuance was part of the European Central Bank’s (ECB) initiative to trial ways for wholesale fiat money settlement on blockchains.

Global banks and asset managers are increasingly exploring ways to put traditional financial instruments such as bonds, credit and funds on blockchains, also known as tokenization of real-world assets. They do so to achieve operational benefits such as faster and more transparent transaction settlements, lower costs and greater efficiency.

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“This transaction demonstrates how public blockchains are a powerful technology for financial institutions, making transactions faster and safer,” Niccolò Bardoscia, head of digital assets trading and investments at Intesa Sanpaolo, said in a LinkedIn post.

“Tokenization is establishing a new standard for efficiency and automation in financial markets, and I believe this technological change will impact not only bonds but every asset class over the coming years,” he added.