A Case Study on Tokenized Bonds
Siemens, one of Germany’s largest companies, issued a Polygon-based tokenized bond offering directly to investors.
In a recent blog post, I wrote about the different types of tokenized financial assets that exist and why that matters. In keeping with my Friday tradition of digging into examples of the topics I write on, today we’ll focus on tokenized bonds.
Back in February, Siemens launched a new tokenized bond product to the tune of $64 million dollars. For those that don’t know, Siemens is “a technology company focused on industry, infrastructure, transport, and healthcare.” Nowhere in there does it say that they are a financial services company, which makes this even more interesting.
Here are the details as I understand it:
- Bond issuance of 60 million Euros
- Bond sold directly (no intermediary bank) to three investors: DekaBank, DZ Bank, and Union Investment
- Bond sales channel through traditional means (traditional fiat payments), while issuance was minted on-chain as tokens
Essentially, unlike traditional avenues of placing debt through the fixed income branch of an intermediary bank, Siemens is put in a position of power to go directly to investors. There are several benefits from the approach that Siemens has taken: potential to reduce transaction cost by going direct, improving efficiency in processes, removing some forms of traditional paperwork, and creating a more liquid secondary market.
What’s even more interesting is that this was enabled by regulation — regulation can be a good thing. Back in 2021, Germany passed the “Electronic Securities Act” which empowers organisations to be able to issue blockchain-based debt. This is a great example of where regulation + innovation moved forward together.
Overall, it’s pretty cool to see Siemens pushing enterprise adoption of tokenized financial assets. I’m sure with this announcement there will be many fast followers in the months to come. Stay tuned!
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