Siemens Issues Its First Digital Bond On Blockchain

Key Points:

• With the issuance of a €60 million, one-year bond on the blockchain, Siemens is the most recent company to foray into the world of digital assets.
• The blockchain assets are issued directly to investors, eliminating the expense and requirement for middlemen in addition to offering a shared ledger that lessens the need for reconciliations.
• Hauck Aufhäuser Lampe Privatbank, which served as bond registrar and offered the digital asset custody solution for the keys, arranged the offering. The bond was purchased by DekaBank, DZ Bank, and Union Investment.

German industrial behemoth Siemens has unveiled its first digital bond, which is backed by a public blockchain and is valued at €60 million with a one-year maturity. It is one of the first companies in Germany to issue a digital bond, according to Siemens.

Ralf P. Thomas, Chief Financial Officer of Siemens, said:

“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, too. We are proud to be one of the first German companies to have successfully issued a blockchain-based bond. This makes Siemens a pioneer in the ongoing development of digital solutions for the capital and securities markets.”

The bond’s issuance on a blockchain has a number of benefits over earlier procedures. For instance, it eliminates the need for central clearance and worldwide paper certifications. In addition, investors can purchase the bond directly without a bank serving as a middleman.

Without using recognized central securities depositories, the digital bond will be sold directly to investors. The bond registrar for the transaction was Hauck Aufhäuser Lampe Privatbank AG. The bond was purchased by DekaBank, DZ Bank, and Union Investment.

Since the Electronic Securities Act took effect in Germany in June 2021, blockchain-based digital bonds have been legal to issue there.

Siemens marketed the assets directly to investors without involving established central securities depositories, taking advantage of the new opportunities provided by the Electronic Securities Act. Since the digital euro was not yet available at the time of the transaction, payments were made via conventional methods. Within two days, the deal might be finished.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.

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