Siemens, the German engineering and technology giant, has issued a digital bond worth 60 million euros ($64 million) on a public blockchain, becoming one of the first companies in Germany to do so.
The bond has a maturity of one year and was sold directly to investors such as DekaBank, DZ Bank, and Union Investment, without the need for central clearing and paper-based global certificates.
Siemens emphasized the benefits of using digital bonds over traditional bond-issuing methods in the announcement. By using blockchain, paper-based global certificates and central clearing can be eliminated, and the bond can be sold directly to investors without needing a bank as an intermediary.
This process enables transactions to be executed much faster and more efficiently than traditional bond-issuing methods.
Although the transaction was completed using classic payment methods because the digital euro was not yet available at the time of the transaction, it was still completed in just two days.
Siemens is positioning itself as a pioneer in the ongoing development of digital solutions for capital and securities markets.
Siemens AG corporate treasurer Peter Rathgeb said, “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 the development of digital securities in Germany.”
Siemens has been experimenting with blockchain technology for several years. In October 2020, Pebbles, a blockchain-based energy trading platform backed by Siemens, held a virtual demo of its marketplace for optimized electricity trading.
