Siemens Issues €60m Digital Bond On Blockchain

Siemens issued its first digital bond on a public blockchain, with a volume of 60 million euros and a maturity of one year, the company said in a statement today.

Blockchain allows the notes to be sold directly to investors and makes paper-based global certificates and central clearing unnecessary, the German industrial giant said Tuesday.

The statement reads that Siemens is one of the first companies in Germany to issue a digital bond, in accordance with Germany’s Electronic Securities Act (Gesetz über elektronische Wertpapiere, eWpG), saying issuing the bond on a blockchain offers a number of benefits compared to previous processes.

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.

“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, too.

“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,” said Ralf P. Thomas, Chief Financial Officer of Siemens AG.

It has been possible to issue blockchain-based digital bonds in Germany since the Electronic Securities Act came into effect in June 2021, according to the statement posted on its website.

“Siemens has used the new possibilities of the Electronic Securities Act and sold the securities directly to investors without engaging established central securities depositories”.

The company said payments were made using classic methods as the digital euro was not yet available at the time of the transaction. The transaction was able to be completed within two days.

“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,” said Peter Rathgeb, Corporate Treasurer at Siemens AG, “We are going to actively drive their ongoing development.”

Hauck Aufhäuser Lampe Privatbank AG acted as the bond registrar for the transaction. DekaBank, DZ Bank, and Union Investment invested in the bond.