Siemens Leads Innovation in Digital Finance with €300 Million Blockchain Bond Issuance

Siemens has once again positioned itself at the forefront of digital finance with the issuance of its second digital bond, valued at €300 million. This bond, which matures in one year, was issued on the SWIAT permissioned blockchain and represents a significant milestone in the ongoing digitalization of the capital and securities markets.

Building on the success of last year’s €60 million digital bond, Siemens’ latest issuance showcases the rapid advancements in blockchain technology, particularly in the realm of securities settlement. The settlement of this bond was completed within minutes, utilizing Germany’s Trigger Solution, which facilitates central bank money payments via the TARGET 2 system. This marks a significant improvement from last year’s issuance, which required a two-day settlement period.

The bond is classified as a crypto security under Germany’s Electronic Securities Act (eWpG) and is the largest of its kind to date. DekaBank, which served as the bond registrar, reports that this issuance has significantly boosted the total volume of eWpG digital securities, which stood at €236 million through June 2024. With the European Central Bank’s (ECB) ongoing trials of distributed ledger technology (DLT) for securities settlement, this figure is expected to grow even further.

Siemens’ issuance also played a crucial role in the ECB’s and Bundesbank’s trials of blockchain technology for the digital financial market. The successful use of the SWIAT blockchain and the Bundesbank’s Trigger Solution highlights the potential of DLT to revolutionize the financial industry by enabling faster, more secure, and fully automated transactions.

“Automated processing within a few minutes shows the enormous potential of this new technology and confirms our strategy of playing a leading role in continuously shaping the digital transformation,” said Peter Rathgeb, Corporate Treasurer of Siemens AG. Rathgeb’s sentiments were echoed by Ralf P. Thomas, Chief Financial Officer of Siemens AG, who emphasized the company’s commitment to driving digital solutions in the financial markets: “Siemens remains a pioneer in the application of the latest technologies on the capital and securities markets.”

The bond attracted investment from major financial institutions, including BayernLB, DekaBank, DZ BANK, Helaba, and LBBW, with Deutsche Bank facilitating the settlement using the Bundesbank’s Trigger Solution. The involvement of these prominent investors and institutions underscores the growing confidence in blockchain-based financial instruments.

This issuance not only solidifies Siemens’ role as a leader in the digital finance space but also contributes to the broader adoption and maturation of blockchain technology within the financial industry. As Siemens continues to leverage its experience and expertise in digital bonds, the company is set to play a pivotal role in the ongoing transformation of global capital markets.

By demonstrating the efficacy and potential of blockchain for securities settlement, Siemens is paving the way for other corporations and financial institutions to explore similar innovations, marking a new era in the digitalization of finance.

Photo by Karsten Würth on Unsplash

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