KfW is preparing to issue its first blockchain-based digital bond in the form of a crypto security in accordance with the German Electronic Securities Act (eWpG). The transaction is scheduled to be completed in summer 2024.
“Digitalisation of the financial industry plays a crucial role in the international competitiveness of the European financial market. As Germany’s largest promotional bank, one of our most important goals is to make an active contribution to the development of the market for digital securities in Germany and Europe.
“With the planned issue of our first crypto security in accordance with the German Electronic Securities Act, we are once again testing an innovation on the financial market and aim to pave the way for future transactions of this type for other market participants,” explained Melanie Kehr, member of the Executive Board of KfW Group and responsible for IT, Transaction Management and Operations, as cited in MarketsMedia.
Since 2022, KfW has gained experience with the digitalization of its money market and derivatives activities and has already issued a first digital bond in the form of a central register security.
“We are now taking the next big step with the issuance of a blockchain-based bond for which we want to attract as many investors as possible,” added Tim Armbruster, treasurer at KfW. The combination of technological progress and a regulated environment has provided KfW with good conditions for taking this next step. “The initial goal on the road to the digitalization of refinancing is to learn and thereby identifying potential for improvement.”
KfW has already been able to win Union Investment as an important anchor investor, which has extensive experience with crypto securities. The transaction will be carried out by a bookrunner consortium consisting of DZ Bank, Deutsche Bank, LBBW and Bankhaus Metzler.