- The bond was issued based on Germany’s Electronic Securities Act, introduced in June 2021 to ensure that blockchain-based debts occur.
- The likes of DekaBank, DZ Bank, and Union have purchased the bond.
Polygon has been able to seal several partnerships with companies from different fields. The latest to work with Polygon is Siemens, Germany’s engineering and manufacturing giant which is the third-largest publicly traded company by market cap. According to reports, the company has issued its first digital bond on the Polygon blockchain worth €60 million ($64 million).
It is reported that the bond was issued based on Germany’s Electronic Securities Act, introduced in June 2021 to ensure that blockchain-based debts occur. The popularity of blockchain-based bonds keeps expanding as companies seek to reduce paperwork in addition to ensuring that potential purchasers are contacted directly without the need for intermediaries like the bank.
Peter Rathgeb, corporate treasurer at Siemens commented that the company has high hopes of observing efficient transactions at a reasonable speed. However, no disclosure was made on the interest rate for the bond.
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.
Siemens has over the years explored the potential of blockchain technology in varieties of fields since June 2021. This includes the payments and debt issuance industry. The blockchain bond was found to be a very interesting venture with a maturity of one year.
The company stated;
makes paper-based global certificates and central clearing unnecessary. What’s more, the bond can be sold directly to investors without needing a bank to function as an intermediary.
Siemens keep exploring blockchain technology
The likes of DekaBank, DZ Bank, and Union have purchased the bond.
It is important to note that the issuance was organized by Hauck Aufhäuser Lampe Privatbank. This company operates as the bond registrar and also provides digital asset custody for the keys. Hauck Aufhäuser Lampe Privatbank’s digital asset unit is led by Simon Seiter, known for heading Deutsche Börse’s Digital Assets units for two years.
It can be recalled that in 2021, Siemens established a partnership agreement with JPMorgan to create a blockchain-based system for payments. The idea was to provide automatic transfers between the company’s accounts in a bid to streamline and simplify payments. In 2018, the company used blockchains for bank guarantees.
This reduces the need for intermediaries and ensures that transactions are faster and more efficient. While Siemens remains one of the few companies to issue digital bonds on a public blockchain, banks such as Societe Generale, Santander, as well as the European Investment Bank have been the main public blockchain issuance. The Deutsche Börse has also used its D7 platform to facilitate several issuances. However, the company has been on a centralized ledger.
Ralf P. Thomas, CFO of Siemens AG said:
We are proud to be one of the first German companies to have successfully issued a blockchain-based bond. This makes Siemens a pioneer in the ongoing development of digital solutions for the capital and securities markets.
The Polygon (MATIC) price has reacted to this partnership with a surge of 9 percent in the last 24 hours and currently trading at $1.35.
Recommended for you:
Subscribe to our daily newsletter!
No spam, no lies, only insights. You can unsubscribe at any time.
