(Adds EIB comments, background) April 28 (Reuters) - The European Investment Bank (EIB) has raised 100 million euros ($121 million) from a two-year digital bond in a further sign of interest from the capital markets in adopting blockchain technology. The two-year bond, registered in the public ethereum blockchain network, priced for a yield of -0.601% on Tuesday, the EIB said on Wednesday. News of the deal earlier sent the world’s second-largest cryptocurrency, ether, which facilitates transactions on the ethereum blockchain, to a record high. Funding officials at the EIB told Reuters this was the first time a syndicate of banks had managed such a sale, adding that the bank wanted the deal to resemble a conventional bond issue as much as possible. Companies and supranational borrowers such as the EIB sell most of their bonds through such syndicated, multi-dealer sales. Many capital market players see blockchain, originally created to run the bitcoin cryptocurrency, as a way to streamline the issuance of securities like bonds and equities. The traditional capital-raising process is expensive and inefficient, involving numerous steps and multiple parties, and proponents say using blockchain could cut costs, time and boost transparency. “The idea was really to investigate into potential efficiency gains,” said Richard Teichmeister, head of funding, new products and special transactions at the EIB. The increased transparency and time efficiencies blockchain offers, in particular, are a potential “game changer” for the capital markets, he told Reuters. Despite growing interest from capital markets, such issuance is far from mainstream, with issuers borrowing very small amounts compared with their traditional bond sales since the World Bank raised A$100 million ($77.70 million) from the first public bond created and managed using only blockchain in 2018. The amount of preparation work the EIB put in to the issuance, starting in late 2019, highlights the challenges of adopting new technology. Societe Generale and Santander, together with Goldman Sachs Inc, managed the EIB’s bond sale, according to the lead manager’s memo. The two European banks have used blockchain for issuing debt in the past, but for internal bond sales. The EIB has a reputation for pioneering new products in Europe’s capital markets. It sold the first green bond in 2007, a market in which hundreds of billions of dollars are now issued annually, and it led sales of bonds tied to new overnight rates SONIA and ESTR launched by the Bank of England and the European Central Bank respectively. (Reporting by Yoruk Bahceli in Amsterdam Additional reporting by Tom Wilson in London Editing by Mark Potter and Matthew Lewis)