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Ethereum received a major vote of confidence from the mainstream banking sector as the European Investment Bank issued bonds that are registered on the blockchain.

As initially reported by Bloomberg, the European Investment Bank (EIB) announced that it would be issuing a ‘digital bond sale’ registered on the Ethereum blockchain with financial service heavyweights Goldman Sachs, Banco Santander and Societe Generale joint leading the management of the bonds.

These bonds carry significant value, to the tune of 100 million euros (($120.8 million) over two years. The news also helped propel ETH to new all-time highs this week after a period of selling pressure that had most of the cryptocurrency markets trading in the red. 

The price of ETH has risen by around 15% over the past week and the world’s second biggest cryptocurrency by market capitalization reached a record $312 billion. 

A big milestone for institutional use-cases

The issuance of these bonds on the Ethereum blockchain by the EIB is already being touted as an important milestone for institutional use of Ethereum.

Fitch Ratings, considered as one of the big three global credit rating agencies worldwide, has also given its stamp of approval on the EIB’s digital bond issuance on the Ethereum blockchain. 

The ratings agency has officially assigned the bond issuance a ‘AAA’ rating, after deemining that the proposed Ethereum-based bonds are in line withiits Long-Term Issuer Default Rating (IDR). Fitch also shared its view that the use of blockchain technology to register these notes do not carry any ‘additional credit risk compared with a traditional bond issuance.’

The terms and conditions of the bond issuance will see these tokenized securities be classed as debt financial instruments under French law. This essentially classifies these Ethereum-based bonds in the same bracket as traditional bond issuance.