Blockchain
German state bank tokenizes bonds on the blockchain
German state bank, Kreditanstalt fuer Wiederaufbau, is entering blockchain territory with its first digital bond, set to transform investment options.
THE German State bank Kreditanstalt fuer Wiederaufbau (KfW) is preparing to launch its first blockchain-based system digital ties in a step aimed at adopting blockchain technology within traditional German financial institutions, as per a Bloomberg report.
Commenting on the latest developments, KfW Treasurer Tim Armbruster said that the bank is taking “the next big step with the issuance of a blockchain-based bond for which we want to attract as many investors as possible.”
“We believe that digitalization will bring benefits in terms of greater efficiency and scalability.”
Tim Armbruster
Prior to the bond’s launch, KfW plans to enter into discussions with European institutional investors during a preparatory phase lasting several weeks. Union Investment, the investment arm of DZ Bank Group, is considered an anchor investor.
Despite the new approach, KfW will maintain traditional bond payment processes, with the transaction expected to complete in the summer months. It is unclear whether the bank intends to use public blockchain networks for digitization or is working on a private solution.
DZ Bank, Deutsche Bank, LBBW and Bankhaus Metzler are said to act as joint bookrunners, while German fintech firm Cashlink Technologies will act as the crypto securities registry. The bond, due in December 2025, will have a minimum size of 100 million euros ($108 million), according to people familiar with the matter.