Germany-based tech company Siemens has issued a virtual bond that respects the rules set in place by German regulators for digital assets.
The digital bond has a maturity of 1 year and a value of EUR 60 million. The company states that the virtual bond is based on a public blockchain network. By releasing the virtual bond on the blockchain, the tech company hopes that it will be able to provide several benefits as opposed to previous traditional processes. For example, the blockchain turns paper-based central clearing and global certificates redundant.
Furthermore, the bond can be traded directly with investors without having a bank act as an intermediary. According to the CFO of the company, the tech player supports the digitalisation of its customers through its capability to roll out products defined by innovation and technology. The company stated that it is among the first enterprises based in Germany to develop a bond underpinned by a blockchain successfully.
In June 2021, Germany introduced the regulation for digital assets which allowed companies like Siemens to release digital bonds on the blockchain. The possibilities that came with the regulation enabled Siemens to sell assets to investors without centralized securities deposits. Since the digital euro was not fully implemented back then, payments required traditional methods. The transaction was completed in two days.