German Industry Giant Siemens Issues Its First Digital Bond On The Blockchain

Siemens, an industry giant in the German market, has issued the country’s first digital bond in accordance with the country’s Electronic Securities Act.

• What: Siemens has issued Germany’s first digital bond on the blockchain, qualifying the company as the first issuer of the product in Germany while solidifying its position as a pioneer in the ongoing digital transformation of capital and securities markets
• Why: The move has eliminated reliance on paper-based global certificates and central clearing procedures
• What next: The digital bond will be sold directly to investors without engaging established central securities depositories

German industry mogul Siemens has announced its first digital bond in accordance with the country’s Electronic Securities Act (Gesetz Gesetz über elektronische Wertpapiere, eWpG), noting that it has a maturity of one year and is bolstered by a public blockchain, according to an official press release.

A pioneer in the ongoing #digitaltransformation of capital and securities markets: @Siemens is one of the first companies in Germany to issue a #digitalbond based on a public #blockchain. Find out more 💡 👇 https://t.co/v1ctLGZnDT

— Siemens Press Office (@siemens_press) February 14, 2023

From the report, the digital bond is worth €60 million, qualifies the company as the first issuer of the product in Germany, and solidifies its position as a pioneer in the ongoing digital transformation of capital and securities markets. Commenting on the matter, Siemens chief financial officer Ralf P. Thomas noted:

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.

Issuing the digital bond on a public blockchain means the elimination of paper-based global certificates and central clearing procedures. Investors can buy the digital bond directly without the intervention of established central securities depositories like banks. This means that they [investors] will enjoy a classic payment directly to their own bank account. With this development, Siemens has leveraged the power of emerging possibilities delivered by Germany’s Electronic Securities Act to directly bring the securities to investors. The move, therefore, challenges the traditional times when payments were made via classic methods because the digital euro was not yet present during the transaction. During this time, transactions would be completed within two days.

Besides the CFO, Siemens’ corporate treasurer Peter Rathgeb also commented on the development, saying, “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. Thanks to our successful cooperation with our project partners, we have reached an important milestone in developing digital securities in Germany.” Rathgeb also assured of the company’s commitment to driving the ongoing development actively.

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