Three German financial institutions — Sparkasse Dortmund, Kreissparkasse Ludwigsburg and Sparkasse Schwarzwald-Baar — are the first to use the DekaBank’s DLT registry for bond issuance to create a Digital Registered Bond used for long-term refinancing of savings banks and institutional customers.
The Digital Registered Bond is based on the blockchain, which makes assignment easier, safer and faster. It also simplifies and improves tradability of registered bonds, for example, follow-up processes previously took up to seven days, and this can now be done in a matter of seconds.
“Thanks to the faster process compared to the classic product, the digital [registered bond] enables faster and more efficient refinancing. This makes the product more attractive for issuers,” said Sebastian Junker, deputy Board member of Sparkasse Dortmund, and Dieter Wizemann, Board member of Kreissparkasse Ludwigsburg, in a joint statement.
“Security and easy handling are crucial for investors and even more so for savings banks when it comes to financial products. The even higher standards of the digital [registered bond] in these important points convinced us,” said Arendt Gruben, CEO of the Sparkasse Schwarzwald-Baar, in a statement.
The blockchain consensus process offers an unprecedented level of security. However, the legal basis remains unchanged in the digital form since the business transaction takes place as before.
“Following the issuance of digital securities, the digital [registered bond] is the next step in Deka’s digitization strategy. The digital registered bond is the first blockchain-based product that has reached full market maturity,” said Martin Müller, who is responsible for the banking business areas and the custodian business on the Deka Board, in a statement.
Deka acts as registrar and paying agent, supports the preparation and carries out the financial transactions. The transactions are technically implemented on the blockchain platform of fintech SWIAT.