Siemens has issued its second digital bond, a €300 million one year bond using the SWIAT permissioned blockchain. Settlement took just minutes and used Germany’s Trigger solution, which triggers a central bank money payment on the TARGET 2 system. Last year Siemens issued a €60 million ‘crypto security’ bond on the Polygon blockchain which still required two-day settlement.
The issuance formed part of the European Central Bank’s (ECB) wholesale DLT settlement trials.
“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.
Digital bonds as crypto securities
This bond is also classified as a crypto security under Germany’s Electronic Securities Act (eWpG). It was by far the largest eWpG bond issued to date. Through to June 2024, the total eWpG digital securities issuances were €236 million according to DekaBank’s eWpG monitor. That said, with the ECB trials, that figure has grown significantly. Government-owned bank KfW has conducted two issuances totalling €150 million since June.
While many describe eWpG digital bonds as bearer bonds, the law requires a registrar to keep track of the asset holders. In this case, DekaBank acts as the bond registrar. It’s also the founder of SWIAT, which is now a joint venture that includes LBBW and Standard Chartered as backers.
The digital bond investors were BayernLB, DekaBank, DZ BANK, Helaba and LBBW, with Deutsche Bank enabling the settlement using the Bundesbank Trigger Solution.
“With the issuance of their second digital bond, Siemens once again demonstrates their spirit of innovation and pioneering. It is the largest crypto security issuance in Germany to date in accordance with the eWpG,” said Thorben Lüthge, Head of Capital Markets at DekaBank.
