Blockchain technology to be utilized by German state bank for tokenization of bonds

Germany’s state-owned bank, Kreditanstalt fuer Wiederaufbau (KfW), is preparing to launch its inaugural digital bonds on the blockchain. This move is aimed at embracing blockchain technology within the traditional financial institutions in Germany, according to a report by Bloomberg. Tim Armbruster, the treasurer of KfW, commented on this development, stating that the bank is taking a significant step forward by issuing a blockchain-based bond and aims to attract a wide range of investors. In preparation for the bond’s launch, KfW plans to hold discussions with European institutional investors over several weeks. Union Investment, the investment arm of the DZ Bank Group, is expected to be an anchor investor. Despite this innovative approach, KfW will reportedly continue to use traditional payment processes for the bond, with the transaction expected to be completed in the summer months. It is unclear whether the bank will utilize public blockchain networks or develop its own private solution for digitization. DZ Bank, Deutsche Bank, LBBW, and Bankhaus Metzler are reported to be joint bookrunners, while Cashlink Technologies, a German fintech firm, will serve as the crypto securities registrar. The bond, which is expected to mature in December 2025, will have a minimum size of €100 million ($108 million), according to insiders.