Siemens issues digital bond on blockchain – The Cryptonomist
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German industrial giant Siemens has released its first digital binding on public blockchain.
The bond has a face value of €60 million and a term of one year.
Blockchain allows bonds to be sold directly to investors and makes global paper certificates and central clearing unnecessary, the German industrial giant said on Tuesday.
All in all, we see that the Siemens share was marginally down on Tuesday morning.
Siemens and the digital bond on the blockchain: all the details
Siemens is one of the first companies in Germany to issue one digital binding in accordance with the German Act on electronic securities (Gesetz über elektronische Wertpapiere, eWpG). The German company is a pioneer in the ongoing digital transformation of the capital and securities markets.
The news is also reported by Blockwork‘ official Twitter account, which reads:
NEW: German industrial giant Siemens issues its first digital bond on blockchain.
The bond has a volume of €60 million and a maturity of 1 year. pic.twitter.com/z05mjjLCXa
— Blockworks (@Blockworks_) 14 February 2023
As expected, in addition to the bond having a volume of €60 million and a maturity of one year, classic payment can be made via bank account.
Issuing the bond on a blockchain offers a number of advantages over previous processes. This makes, for example, global paper certificates and central clearing unnecessary. In addition, the bond can be sold directly to investors without a bank needing to act as an intermediary.
Ralph P. ThomasCFO of Siemens AG, said the following about this:
“With our innovative products and technologies, Siemens supports the digital transformation of its customers very successfully. It therefore makes sense that we also test and use the latest digital solutions in finance. We are proud to be one of the first German companies to issue a blockchain-based bond. This makes Siemens a pioneer in the continuous development of digital solutions for the capital and securities market.”
How Siemens issued its first bond on the blockchain
As we know, it has been possible to issue blockchain-based digital bonds in Germany since the Electronic Securities Act entered into force in June 2021.
Siemens used the new possibilities in the Act on Electronic Securities in this connection and sold the bonds directly to investors without involving securities central offices.
Payments were made by classical methods since the digital euro was not yet available at the time of the transaction. Nevertheless, the latter was completed in two days.
Peter RathgebThe Corporate Treasurer of Siemens AG said about this:
“By moving away from paper and moving to public blockchains for issuing bonds, we can act in ways that would be faster and more efficient than when we issued bonds in the past. Thanks to our successful cooperation with our project partners, we have reached an important milestone in the development of digital titles in Germany.”
That is why Siemens actively leads their ongoing development. Hauck Aufhäuser Lampe Privatbank AG acted as bond registrar for the transaction. DekaBank, DZ Bank and Union Investment invested in the bond.
EIB: its digital bond on blockchain available from November 2022
The The European Investment Bank (EIB)in collaboration with Goldman Sachs Bank Europe, Santander and Société Générale, launched Project Venus last November. Project Venus is their second euro-denominated digital bond and the first to use it Goldman Sachs‘ private blockchain technology.
Actually two years 100 million euro bond represents the first issue on Goldman Sachs’ tokenization platform, called GS Daptm. The digital bond was issued, registered and settled all with the help of this private blockchain-based technology.
Banque de France and Banque centrale du Luxembourg participated in the project by providing a digital representation of central bank money in euros in the form of tokens. Société Générale Luxembourg and Goldman Sachs Bank Europe SE acted as chain managers.
The Venus project consists of the EIB issuing a series of bonds on a blockchain, where investors bought and paid for security tokens using traditional currency.
The project’s co-leaders, Goldman Sachs Bank Europe SE, Santander and Société Généralesettled the subscription against the issuer using a representation of the central bank’s digital currency, or CBDC.
