News
KfW to issue blockchain-based digital bonds
German bank KfW is preparing to issue its first blockchain-based digital bond in the form of a crypto security in compliance with the German Electronic Securities Act (eWpG).
The blockchain-based transaction will be carried out by a consortium of bookrunners consisting of DZ Bank, Deutsche Bank, LBBW and Bankhaus Metzler, with Union Investments enlisted as the lead investor. Additional investors will be involved in the coming weeks and the transaction will be completed in the summer of 2024.
KfW has already issued a first digital bond in the form of a central register security. “We are taking the next big step with the issuance of a blockchain-based bond for which we want to attract as many investors as possible,” says Tim Armbruster, treasurer of KfW. «The initial objective in the journey towards the digitalisation of refinancing is to learn and thus identify the potential for improvement. We believe that digitalization will bring benefits in terms of greater efficiency and scalability.”
Frankfurt-based fintech Cashlink Technologies GmbH will serve as the crypto securities registry.
With this transaction KfW is limited to issuing the bond in digital format. Payments will continue to be processed in the traditional way using established payment systems.