KfW Set to Issue Blockchain-Based Digital Bond as Germany's Largest State-Owned Bank Embraces Crypto

In line with our recent update on the German State-Owned Bank embracing Bitcoin and crypto: KfW is set to issue a blockchain-based digital bond.

German state-owned bank KfW to issue digital bond on blockchain

March 14, 2023

KfW is set to issue a blockchain-based digital bond, Boerse Stuttgart Digital announced on Tuesday.

The upcoming bond offering will be integrated into the European Central Bank’s trials aimed at facilitating blockchain-based transactions with central bank money.

“As one of the world’s largest and most active bond issuers, we are actively driving digitalization initiatives in the issuing and settlement process,” said Gaetano Panno, head of Transaction Management at KfW.

“The utilization of new technologies as part of the ECB trials enables us to technically process a ‘delivery vs. payment’ transaction and thus supports our digital learning journey.”

KfW, Germany’s largest development bank, is collaborating with Boerse Stuttgart Digital (BSD) to advance its blockchain-based bond issuance, which is set to roll out in the coming weeks under the German Electronic Securities Act (eWpG).

BSD will manage the crypto wallets and safeguard private keys during issuance and redemption.

The upcoming digital bond will be integrated into the ECB’s trials, which aim to facilitate blockchain-based transactions with central bank money.

“We are delighted that KfW, as a leading issuer in the European debt capital market, has chosen Boerse Stuttgart Digital for the technical implementation of its digital bond,” said Guido Fuerer, managing director of Boerse Stuttgart Digital Services.

“Together, we are setting a new standard for the digitalization of the securities industry and paving the way for further innovations in the capital market.”

KfW made its debut in the digital securities market last year with a 100 million euro ($108 million) tokenized security offering, which was issued in July and utilized the Polygon (MATIC) network.

In a related development, last month saw the completion of a blockchain-based bond issuance by Italy’s Cassa Depositi e Prestiti SpA and Intesa Sanpaolo, which was carried out as part of an ECB trial.

At press time, MATIC is trading at $0.4198, according to CoinMarketCap, up 2.77% in the past day and 3.64% over the past week.

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