German company, Siemens has issued its first digital bond on the Polygon blockchain, valued at €60 million ($64 million).
The bond was issued in compliance with the Electronic Securities Act of Germany, which became effective in June 2021 and permits the selling of debt based on blockchain technology.
Bonds built on blockchain technology are anticipated to streamline the application process and enable direct communication with buyers, eliminating the need for middlemen like banks.
The company claimed in a statement that the blockchain bond, which has a one-year maturity according to CoinDesk, “makes paper-based global certificates and central clearing superfluous.” Additionally, the bond can be offered directly to investors without the assistance of a bank.
The corporation did not disclose the bond’s interest rate, but it did express the expectation that this will expedite and improve the efficiency of similar transactions in the future. A corporate treasurer at Siemens, Peter Rathgeb said:
“By moving away from paper and toward public blockchains for issuing securities, we can execute transactions significantly faster and more efficiently than when issuing bonds in the past,”
Since 2021, Siemens, a global leader in engineering and manufacturing, has been actively investigating the applications of blockchain technology in a range of fields, including payments and the issuing of debt.
Siemens and JPMorgan Chase collaborated in 2021 to create a blockchain-based payment system that allows for seamless money transfers between Siemens’ own accounts.
This approach promises to streamline and simplify payments, obviating the need for middlemen and facilitating quicker, more effective transactions.
The MATIC token price jumped 7.21% during trading on February 14 as a result of the Polygon network’s announcement that Siemens had issued its first digital bond. MATIC is now available for $1.25.
