Siemens, Germany’s third-largest publicly traded company by market cap, has taken a major step forward in the world of blockchain technology by issuing its first digital bond. The 60 million euro ($64 million) bond, issued on the Polygon blockchain, has a maturity of one year and is the first of its kind to be issued in Germany.
The bond is designed to reduce paperwork and allow Siemens to reach out to potential purchasers directly. By using blockchain technology, the company can execute transactions significantly faster and more efficiently than when issuing bonds in the past. The bond also eliminates the need for paper-based global certificates and central clearing, and can be sold directly to investors without needing a bank to function as an intermediary.
Siemens’ foray into blockchain technology began in December 2021, when it partnered with JPMorgan Chase to develop a blockchain-based system for payments. The system is used to automatically transfer money between the Munich-based company’s own accounts.
The Electronic Securities Act, which allows the sale of blockchain-based debt to take place, came into force in June 2021. Since then, other German companies have followed suit and issued digital bonds on blockchain technology.
Siemens’ corporate treasurer, Peter Rathgeb, said that the company is “excited to be at the forefront of this new technology” and that it is “confident that this will be the first of many successful blockchain-based bond issuances.”
The move is a major step forward for blockchain technology and could pave the way for other companies to follow suit. It remains to be seen how successful the bond will be, but it is certainly an exciting development in the world of finance.