German Tech Giant Siemens Issues Its First Digital Bond on Public Blockchain

German technology giant Siemens (SIE) has issued its first digital bond on the Polygon blockchain. According to a press release, the $64 million bond has a maturity of one year and was issued in line with the German Electronic Securities Act. Recall that the Electronic Securities Act became effective in June 2021.

Per the February 14 release, the blockchain bond makes it so that there’s no need for “paper-based global certificates and central clearing.” Essentially, this means that the bond may be sold directly to investors such as DZ Bank, DekaBank, and Union Investment. The statement read in part:

“What’s more, the bond can be sold directly to investors without needing a bank to function as an intermediary.”

Furthermore, Siemens also highlighted other benefits that digital bonds bring as opposed to what’s obtainable with traditional bond-issuing methods. For instance, the process ensures that transactions are executed considerably faster and more efficiently than those achieved with previous methods.

Other German companies that have issued digital bonds on blockchain technology can be seen here.

Siemens Forays Deeper Into Blockchain Technology

It might be worth noting that this sale is not the first time Siemens will be experimenting with blockchain technology. In July 2019, Siemens was considering using blockchain technology for a carsharing program through one of its arms – Siemens Mobility.  In October 2020, it was also reported that Siemens-backed energy trading platform Pebbles held a virtual demo of its marketplace. Again,  in December 2021, the technology giant partnered with JPMorgan Chase to develop a blockchain-backed payments system.

But, while it continues to explore the world of blockchain technology,  Siemens is also keen on being the pioneer of the ongoing digital transformation in the capital and securities markets. To put that into perspective, Siemens corporate treasurer Peter Rathgeb says:

“Thanks to our successful cooperation with our project partners, we have reached an important milestone in the development of digital securities in Germany.”

More blockchain news can be found here.