State-owned German Bank Set to Introduce Blockchain-Backed Digital Bonds
The German state-owned bank Kreditanstalt für Wiederaufbau (KfW) announced on May 6 that it will launch its first blockchain-based digital bonds. The move signifies a major step towards adopting blockchain technology within traditional financial institutions in Germany.
The KfW bank official press release stated that the forthcoming blockchain-based digital bond would be issued as crypto security, adhering to the German Electronic Securities Act (eWpG).
A blockchain-based digital bond is a type of security issued and managed using blockchain technology. The blockchain allows the bond’s details and ownership to be recorded securely and transparently on a digital ledger, streamlining the bond issuance and trading process in real time.
The bond is set to be finalized in the summer of 2024, spanning from June to September, while payments will be processed through conventional payment systems.
KfW also disclosed it had successfully secured Union Investment as a key anchor investor, leveraging the company’s experience with crypto securities, which is important for the transaction’s preparation.
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