- The bond, issued under the Electronic Securities Act in 2021, has a maturity of one year.
- Some of the subscribers include DekaBank, DZ Bank, and Union Investment.
Germany’s largest industrial manufacturing company Siemens has issued a digital bond on a public blockchain, making it one of the pioneer companies in the European country to adopt blockchain technology. The bond has a volume of €60 million ($64 million) and a maturity period of one year.
One of the benefits of issuing a bond on a public blockchain is that it makes paper-based global certificates and central clearance unnecessary, notes the announcement. It also provides a means for corporations to sell bonds directly to customers without intermediaries.
Commenting in a press release, Ralf Thomas, the Chief Financial Officer of Siemens AG, said: ‘‘with our innovative products and technologies, Siemens supports the digital transformation of its customers with great success. It is therefore logical that we test and utilize the latest digital solutions in finance, too.’’ Siemens has become one of the latest corporations to issue a bond of such a kind.
Speed, Efficiency, and Disintermediation
Issuing digital bonds on a blockchain is notably faster than traditional bonds, another advantage the company said was at the center of its operational efficiency.
‘‘By moving away from paper and toward public blockchains for issuing securities, we can execute transactions significantly faster and more efficiently than when issuing bonds in the past. Thanks to our successful cooperation with our project partners, we have reached an important milestone in the development of digital securities in Germany,’’ said Peter Rathgeb, Corporate Treasurer at Siemens AG. Some of Siemens’ clients that have already signed up for the digital bond include DekaBank, DZ Bank, and Union Investment.
Germany is considered one of the most crypto-friendly countries. Since the introduction of its Electronic Securities Act in 2021, most regional corporations have been able to issue blockchain-based digital bonds. The Act positioned Berlin strategically in the digital asset space, including the Decentralized Finance (DeFi) ecosystem.
