Technology Giant Siemens Launches First Digital Bond on a Public Blockchain

Siemens, a German multinational conglomerate corporation and the largest industrial manufacturing company in Europe, has issued a digital bond on a public blockchain.

According to the press release shared on February 14th, a digital bond is worth 60 million euros ($64 million) and has a maturity of one year.

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The bond was issued on the Polygon blockchain and, according to the firm, offers “a number of benefits compared to previous processes.”

Siemens claims that one of the main benefits of digital bonds is that they can be sold directly to investors without the intervention of a bank. On top of that, Siemens highlighted that digital bonds eliminate the need for “paper-based global certificates and central clearing.”

When talking about digital bond benefits, Siemens AG Corporate Treasurer Peter Rathgeb stated:

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.

It can be assumed that the partner Peter Rathgeb was talking about is Hauck Aufhäuser Lampe Privatbank AG, which acted as bond registrar and provided digital asset custody solutions.

Based on the announcement, the bond was launched in accordance with Germany’s Electronic Securities Act, which allows German companies to sell blockchain-based debt.

The 60 million euro digital bond received investments from DekaBank, DZ Bank, and Union Investments.

It is not the first time Siemens is incorporating blockchain technology into its operations. At the end of 2021, JPMorgan Chase partnered with Siemens to create a blockchain-based payment system for the German technology giant. At that time, several sources claimed that the system would be used to transfer funds between Siemens’ accounts.