Siemens, Germany’s largest industrial manufacturer has issued a €60m one year digital bond on the public Polygon Mainnet. It has done this to reduce paperwork and reach out to potential customers directly. Also there was no mention of an interest rate on the bond.
In December 2021, JPMorgan Chase worked with Siemens to develop blockchain based automated payments. The system is used to automatically transfer money between the Munich based company’s own accounts.
.@Siemens is on @0xPolygon. 🦄💫— Mihailo Bjelic (@MihailoBjelic) February 15, 2023
They issued a fully compliant, $60M on-chain bond, reducing costs and need for reconciliations and removing intermediaries.
They did it themselves, without any involvement from Polygon Labs. Permissionless innovation! 🤗https://t.co/Js94eUeHl0
It has been possible to issue blockchain based digital bonds in Germany since the Electronic Securities Act came into effect in June 2021. The Electronic Securities Act establishes a legal basis for the trading of rights through electronic securities registers and adds a new license category for maintaining a crypto securities register.
It introduces a new category of “electronic securities” that are equivalent to traditional securities issued by means of a physical certificate. The requirement for a physical certificate is replaced by an entry in an electronic securities register. The new law classifies electronic securities as “moveables” within the meaning of section 90 of the German Civil Code.
Siemens has used the new possibilities of the Electronic Securities Act and sold the securities directly to investors without engaging established central securities depositories. 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.
Ralf P. Thomas, Chief Financial Officer of Siemens AG said, “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.”
“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.
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