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Germany Tests Blockchain Digital Bonds with KfW Launch

Kfw Digital Blockchain Digital Bonds

The Kreditanstalt für Wiederaufbau (KfW), which is a state-owned bank in Germany, has announced that it intends to conduct its first digital bonds based on blockchain technology.

According to an official press release that was issued on May 6, these digital bonds will be classified as crypto securities and will comply with the laws that are described in the German Electronic Securities Act (eWpG).

Using blockchain technology, digital bonds are able to keep the details of the bond as well as the ownership of the bond on a digital ledger that is both safe and transparent. This allows for the processing of the issuance and trading operations to take place in real time. KfW, on the other hand, stated that the settlement of financial transactions associated with these bonds will be carried out through conventional payment methods, despite the fact that the most recent blockchain technology was utilized. According to the release, the bond will be finished in the summer of 2024, according to the schedule.

When it comes to this project, KfW has a number of significant partners involved. The information that Union Investment possesses regarding crypto assets is essential in the process of preparation for the transaction, as it is a major anchor investor regarding the deal. In addition, DZ Bank, Deutsche Bank, LBBW, and Bankhaus Metzler will be the members of the group of bookrunners that will be responsible for managing the issue process and interacting with investors. Furthermore, DZ Bank will be the collective registered holder of the bond, and Cashlink Technologies will be the registrar of crypto securities for the bond.

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According to Tim Armbruster, the Treasurer of KfW, “The initial goal on the road to the digitalization of refinancing is to learn and, as a result, identify the potential for improvement.”

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