Siemens Issues World's First Blockchain Bond
Luisa Crawford Feb 17, 2023 09:08
Siemens claims that "releasing the bond on a blockchain provides a variety of advantages compared to prior approaches," including removing banks as middlemen.
Siemens, a German multinational firm that is a leader in the fields of engineering and technology, is one of the first companies in Germany to issue a digital bond on a public blockchain. Because of this achievement, Siemens is now able to count itself among an exclusive club of enterprises in Germany. It has a value of sixty million euros (or sixty-four million dollars), a maturity date of one year, and a maturity date, all in accordance with Germany's Electronic Securities Act.
According to the announcement that was released on the 14th of February, the bond was issued directly to investors such as DekaBank, DZ Bank, and Union Investment without the need of paper-based international certificates or central clearing. When compared to the traditional methods of issuing bonds, Siemens commented that the approach made it possible for transactions to be carried out substantially more rapidly and effectively.
In the announcement, Siemens put a significant amount of emphasis on the benefits of employing digital bonds as compared to traditional bond-issuing methods. The company asserts that "issuing the bond on a blockchain delivers a lot of benefits" as contrasted to the procedures that came before it. Two examples of items that will become unnecessary as a consequence of this change are paper-based international certifications and central clearance. In addition to this, the bond may be issued to investors on a one-on-one basis without the need for an intermediary financial institution such as a bank to be present during the transaction.
Despite the fact that the transaction was carried out using conventional modes of payment rather than the digital euro at the time of the transaction since the digital euro was not yet available, it was nonetheless completed in only two days. Siemens has set itself the lofty objective of being the industry leader in the ongoing process of creating digital solutions for the capital and securities markets. This is a very ambitious target.
Image source: Shutterstock