Siemens is the latest company to venture into digital securities, issuing a 60 million euro ($65 million) one-year bond on the public Polygon blockchain. The issue was arranged by Hauck Aufhäuser Lampe Privatbank, which acted as the bond registrar and provided the digital asset custody solution for the keys. DekaBank, DZ Bank and Union Investment bought the bond.

The tokenized bond was issued under Germany’s eWpG legislation for digital native electronic securities that passed in mid-2021. The legislation supports both centralized ledgers and distributed blockchains. The Deutsche Börse has used its D7 platform for various issues, but until now they have been in a centralized registry.

In addition to providing a shared ledger that reduces the need for reconciliations, blockchain securities are issued directly to investors, avoiding the cost and need for intermediaries.

Siemens is one of the first large companies to issue digital native bonds on a public blockchain, although there have been many more on private blockchains. To date, the main public blockchain issuances have been made by banks such as Societe Generale, Santander, as well as the European Investment Bank. ABN Amro has also made some small issues for corporate clients.

While Hauck Aufhäuser Lampe Privatbank might not be the first bank you’d consider for tokenized securities, its digital assets unit is led by Simon Seiter, who led Deutsche Börse’s Digital Assets unit for two years until September 2021.

Innovation is part of Siemens’ DNA and it has been involved in blockchain initiatives for years. It used blockchain for bank guarantees in 2018 and more recently partnered with JP Morgan’s Onyx unit for blockchain-based payments.

“We are proud to be one of the first German companies to have successfully issued a blockchain-based bond,” said Ralf P. Thomas, CFO of Siemens AG. “This makes Siemens a pioneer in the continuous development of digital solutions for the capital and securities markets.”