Industrial Giant Siemens Issues First Digital Bond on Blockchain
The German conglomerate Siemens has issued for the first time a blockchain digital bond denominated in euros. The corporation in an announcement highlighted the benefits of using blockchain, including the opportunity for direct sale to investors.
First Digital Bond Issued under the Electronic Securities Act
€60 million bonds (USD 64 million) have a maturity of one year and are based on the Polygon blockchain, according to crypto media reports. Announcing the deal on Tuesday, Siemens highlighted the advantages of the blockchain platform over traditional methods:
"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."
"By
moving away from paper and towards public blockchains for issuing securities,
we can execute transactions significantly faster and more efficiently than when
issuing bonds in the past," said Corporate Treasurer at Siemens AG, Peter
Rathgeb.
Siemens
revealed the Electronic Securities Act in Germany allows business organizations
to issue blockchain-based digital bonds. It also said it had sold the
securities directly to investors without engaging established central
securities depositories.
"Payments
were made using classic methods as the digital euro was not yet available at
the time of the transaction," the press release noted. Hauck Aufhäuser
Lampe Privatbank AG acted as the bond registrar for the transaction, which was
completed within two days, while Union Investment, Dekabank, and DZ Bank
invested in the bond.
Siemens to Pursue the Development of Digital Securities
"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, adding that the corporation will continue to pursue the
development of digital securities.
"With
our innovative products and technologies, Siemens supports the digital
transformation of its customers with great success. It is therefore only
logical that we test and utilize the latest digital solutions in finance,"
added Ralf Thomas, the chief financial officer of Siemens.
"We
are proud to be one of the first German companies to have successfully issued a
blockchain bond. This makes Siemens a pioneer in the development of digital
solutions for the capital and securities markets," Thomas explained.
Europe has a long way to go in regulating its blockchain space. In 2022, key
institutions in Brussels and member states reached an agreement on
the European Union’s new Markets in Crypto Assets (MiCA) legislation.
MiCA is expected to be effective in 2023, but businesses will have a compliance
window of 12 to 18 months. A digital euro is
currently in development.
Do you think more blockchain-based digital bonds will be issued in Europe soon? Please post your comments.
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