Siemens has launched Germany’s first digital bond based on the blockchain, it announced this week.
The German engineering and tech behemoth became one of the country’s first enterprises to issue blockchain bonds. The securities are valued at €60 million and mature after one year, following the German Electronic Securities Act.
Investors such as DekaBank, Union Investment, and DZ Bank purchased the bonds. Regulators did not require the securities to obtain central clearing and paper-based global certificates, the statement read.
Siemens claimed that the Polygon-based blockchain bonds expedited transactions faster and more efficiently than traditional methods. It also stressed how using digital bonds over paper and traditional means could offer benefits.
The statement continued: “Issuing the bond on a blockchain offers a number of benefits compared to previous processes. For instance, it makes paper-based global certificates and central clearing unnecessary. What’s more, the bond can be sold directly to investors without needing a bank to function as an intermediary.”
The document cleared in two days, despite using traditional payments due to a lack of a digital euro. Siemens hopes to lead markets in developing digital securities and capital solutions.
Peter Rathgeb, Corporate Treasurer for Siemens AG, added: “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.
He added that the successful cooperation with project partners allowed the firm to reach “an important milestone” in developing digital securities in Germany.
The news comes as Siemens advocates implementing blockchain technologies across industry verticals. The company was among the first, along with JP Morgan, to test blockchain-based automated payment systems on the latter’s Onyx system — the world’s first.
