Slovenia Issues First Digital Sovereign Bond In Europe

Slovenia became the first European Union country to issue a sovereign digital on-chain bond.

The $30 million euro or $32.5 million bond issued on July 25 is part of an experimental program with the European Central Bank wholesale central bank money (CeBM) scheme. The settlement took place through Bank of France’s tokenized cash solution and was coordinated by BNP Paribas.

Slovenia’s digital bond brings investors a carry return of 3.65%, which is the coupon on the bonds minus the interest costs of the short-term borrowing. It has set a final maturity rate for Nov. 25.

It’s an exciting time in Europe for cryptocurrencies. The region has been gearing up for its landmark Markets in Crypto Assets (MiCA) regulatory framework, and in what seemed unlikely a few years ago, its central banks are inching their way towards a blockchain-powered future.

With a 2.1 million population, Slovenia is on the smaller end of countries in Europe, although it has been an important player for attracting crypto investors and companies. Ljubljana, the capital, was named the most crypto-friendly country in 2022, and the country charges no VAT or capital gains tax on digital assets.

According to research firm CoinCub, the country ranks 16 in terms of crypto-friendly regulation, taxation, ecosystem, talent, and finance factors. CoinCub lands Switzerland first, followed by Singapore, the UAE, and notably, the United States.