Industrial Giant Siemens Issues €60 Million Digital Bond on Blockchain – Siemens, the largest industrial manufacturer in Europe, has announced that it is among the first companies in Germany to issue a digital bond in compliance with the Electronic Securities Act, which became effective in June 2021. According to reports from cryptocurrency media, the bond worth €60 million ($64 million) has a maturity of one year and is built on the public blockchain of Polygon.
Announcing the deal on Tuesday, Siemens emphasized certain advantages of employing a blockchain platform over traditional methods: “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.”
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“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,” Corporate Treasurer at Siemens AG Peter Rathgeb was quoted as stating. Siemens noted that the Electronic Securities Act of Germany permits organizations to release digital bonds on the blockchain.
The company further stated that it has sold the securities directly to investors without utilizing established central securities depositories. “Payments were made using classic methods as the digital euro was not yet available at the time of the transaction,” the press release noted. 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.
“Thanks to our successful cooperation with our project partners, we have reached an important milestone in the development of digital securities in Germany,” Peter Rathgeb also noted, adding that the corporation will continue to be actively involved in their development.
“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,” added Ralf Thomas, the chief financial officer of Siemens.
“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 executive elaborated.
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Although Europe has yet to fully regulate its blockchain industry, in 2022, critical institutions in Brussels and member states reached a consensus on the European Union’s novel Markets in Crypto Assets (MiCA) legislation. The MiCA is projected to come into effect in 2023, but companies will have an additional 12 to 18 months to adhere to it. Additionally, a digital euro is presently being developed.