German state-owned bank Kreditanstalt fuer Wiederaufbau is entering blockchain territory with its first digital bond, which will transform investment opportunities.
German state-owned bank Kreditanstalt fuer Wiederaufbau (KfW) is preparing to launch its first-ever blockchain-based digital bonds in a move aimed at the adoption of blockchain technology within traditional German financial institutions, a Bloomberg report shows.
Commenting on the latest development, KfW Treasurer Tim Armbruster said the bank is “taking the next big step with the issuance of a blockchain-based bond for which we want to attract as many investors as possible.”
“We believe digitalization will be beneficial in terms of increased efficiency and scalability.”
Tim Armbruster
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Prior to the launch of the bond, KfW plans to enter into discussions with European institutional investors during a preparatory phase of several weeks. Union Investment, the investment arm of DZ Bank Group, is seen as an anchor investor.
Despite the new approach, KfW will reportedly maintain traditional payment processes for the bond, with completion of the transaction expected in the summer months. It is unclear whether the bank plans to use public blockchain networks for digitalization or is working on a private solution.
DZ Bank, Deutsche Bank, LBBW and Bankhaus Metzler would act as joint bookrunners, while German fintech company Cashlink Technologies will serve as registrar for crypto securities. The bond, with an expected maturity date of December 2025, will have a minimum size of €100 million ($108 million), according to people familiar with the matter.
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