KfW relies on digital bonds and calls for a modernized infrastructure for the competitiveness of the European capital market, writes Deutsche Bank in conversation with KfW Group treasurer Tim Armbruster.
Unlike most other banks, KfW refinances itself largely through the international capital markets.
“We need to know what is moving there, which technologies are prevailing and whether they can help us make our processes more efficient. If we look to Asia, the US, UK or Switzerland: things are happening there. And we, too, must start testing new technologies,” said Armbruster.
“Our world is becoming increasingly digital, because digitization ensures greater efficiency – this has also been shown in other areas. And once we have established the ‘DLT highway’ on which everyone can travel quickly, we are talking about completely different dimensions.
“There will certainly be a transitional phase in which both ecosystems – the digital and the analogue – will run in parallel. But in the long term? Think of artificial intelligence in conjunction with the potential of blockchain – there’s an awful lot of potential in that. This is creating enormous dynamism in the capital market.
“If we wanted to be really visionary, the next step would be a tokenized economy – you can implement things much more efficiently and quickly there. If the technology is mature and secure, why should you still go the old way?”