German state-run development bank Creditanstalt für Wiederaufbau (KfW) is preparing for its first blockchain-based issuance digital bondmarks an important milestone in the introduction of cryptographic technology in the financial sector.
According to recent information, report According to Bloomberg, KfW has already successfully issued digital bonds as centrally registered securities in compliance with the German Electronic Securities Act (eWpG). The bank is preparing to take the next step by offering blockchain-based bonds to attract a wide range of investors.
Streamlined crypto bond offering
Finance Minister Tim Armbruster expressed optimism about the benefits of digitalisation in terms of increased efficiency and scalability. Recognizing these potential benefits, KfW aims to exploit them. blockchain technology This is to streamline and increase the bond issuance process.
KfW will hold preliminary consultations in the coming weeks to inform European institutional investors about the upcoming transaction.
This reportedly gives investors ample time to understand and evaluate the opportunities presented by blockchain-based bonds. Union Investment, an experienced investor in crypto assets, was announced as the anchor investor for this transaction.
According to the report, Corporate bond issue Although the payments will be made digitally, KfW will continue to process payments using traditional payment systems. The transaction is expected to close this summer.
Anonymous sources reveal expected €100 million deposit
Several prominent financial institutions are working together to facilitate the bond issuance. DZ Bank, Deutsche Bank, LBBW and Bankhaus Metzler will act as joint bookrunners and oversee the process. Frankfurt-based fintech company CashLink Technologies GmbH will become the crypto asset registrar.
Specific details of the bond were not disclosed, but an anonymous person familiar with the matter said the minimum amount is expected to be 100 million euros ($108 million). The bonds are scheduled to mature in December 2025, providing investors with a clear investment timeline.
KfW's move follows in the footsteps of JPMorgan, which recently entered the crypto market by adopting blockchain technology to offer municipal bonds to investors. The move reflects growing awareness of blockchain's potential to revolutionize traditional financial operations.
KfW's pioneering issuance of blockchain-based digital bonds set a precedent for other financial institutions to explore similar paths.
Successful implementation of this technology could lead to increased efficiency and accessibility in fixed income markets, ultimately transforming the way crypto assets are issued and traded between traditional financial institutions. there is.
As of this writing, the cryptocurrency market is worth $2.2 trillion. Bitcoin (BTC), the most dominant cryptocurrency in terms of market capitalization, is currently trading at $63,200.
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