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Siemens Issues Blockchain-Based Digital Bond Denominated In Euros

Siemens, the largest industrial manufacturer in Europe, has become one of the first companies in Germany to issue a digital bond in accordance with the country’s Electronic Securities Act which came into force in June, 2021.

It has been reported that the €60-million bond ($64 million) has a maturity of one year and is based on a public blockchain, that of Polygon, according to crypto media reports.

Announcing the deal on Tuesday, Siemens said:

“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.”

Peter Rathgeb, the Corporate Treasurer at Siemens AG, said:

“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.”

However, Germany’s Electronic Securities Act allows organizations to issue blockchain-based digital bonds, Siemens pointed out. It also said it has sold the securities directly to investors without engaging established central securities depositories.

The press release noted:

“Payments were made using classic methods as the digital euro was not yet available at the time of the transaction.”

Likewise, 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.

Rathgeb added:

“Thanks to our successful cooperation with our project partners, we have reached an important milestone in the development of digital securities in Germany.”

Ralf Thomas, the 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. 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.”

Thus, Europe is yet to comprehensively regulate 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 enter into force in 2023 but businesses will have another 12 to 18 months to comply with it. A digital euro is currently under development.




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