Siemens Pioneers Rapid Settlement with €300M Blockchain Bond
Siemens AG has pushed the boundaries of financial technology by issuing a €300 million digital bond on blockchain, marking a significant milestone in the digitalization of capital markets. This latest issuance, settled within minutes using central bank money, showcases the potential of distributed ledger technology (DLT) in revolutionizing traditional financial processes.
The one-year bond, issued under Germany’s Electronic Securities Act (eWpG), leveraged the private permissioned blockchain of SWIAT and the Bundesbank’s Trigger Solution. This combination enabled Siemens to achieve near-instantaneous settlement, a dramatic improvement from the two-day settlement period required for its previous €60 million digital bond issued on the Polygon blockchain last year.
Peter Rathgeb, Corporate Treasurer of Siemens AG, highlighted the significance of this achievement: “Automated processing within a few minutes demonstrates the enormous potential of this new technology and confirms our strategy of playing a leading role in continuously shaping the digital transformation.”
The issuance forms part of the European Central Bank’s (ECB) ongoing trials to explore the use of blockchain technology for wholesale securities settlement. It represents the largest eWpG bond issued to date, significantly boosting the total volume of digital securities under this framework.
Several major German financial institutions participated in the transaction, underscoring the growing interest in blockchain-based financial instruments among traditional banks. DekaBank acted as the bond registrar, while BayernLB, DZ BANK, Helaba, and LBBW invested in the securities. Deutsche Bank facilitated the settlement process using the Bundesbank Trigger Solution, ensuring the transaction was completed in central bank money.
This successful issuance not only demonstrates Siemens’ commitment to innovation in financial markets but also sets a precedent for future securities issuance and settlement. The near-elimination of settlement risk and the drastic reduction in processing time could pave the way for more efficient and secure financial transactions.
As Europe takes the lead in adopting blockchain and digital asset technology, with the EU’s Markets in Crypto Assets (MiCA) regulations providing a unified framework, more financial institutions are expected to explore similar blockchain-based solutions. This trend is driven by the need for greater efficiency and speed in transactions, with central banks and traditional financial institutions increasingly recognizing the potential benefits of DLT.
Ralf P. Thomas, Chief Financial Officer of Siemens AG, emphasized the company’s pioneering role: “By issuing another digital bond, we are demonstrating once again our spirit of innovation and underscoring our aim to continuously drive digital solutions for the financial markets.”
