- The bond was offered directly to investors including DekaBank, DZ Bank, and Union Investment.
- The procedure allowed for transactions to be carried out far more quickly and efficiently.
Siemens, a German industrial and technology behemoth, has issued a digital bond on a public blockchain, making it one of the first firms in Germany to do so. In compliance with the German Electronic Securities Act, it has a value of 60 million euros ($64 million) and a maturity of one year.
The bond was offered directly to investors including DekaBank, DZ Bank, and Union Investment, skipping the requirement for central clearing and paper-based worldwide certificates, as stated in a release dated February 14.
As Siemens pointed out, the procedure allowed for transactions to be carried out far more quickly and efficiently than conventional bond-issuing processes. Siemens highlighted the advantages of digital bonds over conventional bond issuance processes in the press release.
According to the company:
“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.”
Since the digital euro wasn’t accessible at the time of the transaction, the payment was processed through more traditional techniques, however, the whole process took just two days. Siemens’ long-term goal is to establish itself as an industry leader in the creation of innovative digital solutions for the financial markets.
Siemens has been exploring blockchain applications for a few years now. It was announced in October 2020 that Pebbles, a Siemens-backed blockchain energy trading platform, has conducted a simulated demo of its optimized electricity trading.
Additionally, Siemens evaluated using blockchain technology for a car-sharing service in July 2019 through Siemens Mobility, one of its affiliates.
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