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German state bank ventures into blockchain with digital bond
Germany’s state-owned bank, Kreditanstalt fuer Wiederaufbau (KfW), has introduced its inaugural digital bonds. This step reflects the institution’s commitment to modernizing traditional financial practices, according to a recent Bloomberg report.
Tim Armbruster, Treasurer of KfW, expressed the bank’s enthusiasm for this milestone, stating, “We are embarking on a significant journey with the issuance of blockchain-based bonds, aiming to attract a diverse range of investors.”
Emphasizing the potential benefits of digitalization, Armbruster highlighted increased efficiency and scalability as key advantages.
Preparatory discussions with European institutional investors are on the agenda ahead of the bond’s launch, with Union Investment identified as an anchor investor.
While KfW plans to maintain traditional payment processes for the bond, the transaction is slated for completion during the summer months.
However, it remains uncertain whether public blockchain networks or a proprietary solution will facilitate the digitization process.
Key players involved in this venture include DZ Bank, Deutsche Bank, LBBW, and Bankhaus Metzler, acting as joint bookrunners, while Cashlink Technologies, a German fintech firm, will serve as the crypto securities registrar.
With an expected maturity date in December 2025, the bond is set to have a minimum size of €100 million ($108 million), according to insiders familiar with the matter.