Global Manufacturing Giant Siemens Issues First Digital Bond On The Blockchain
German manufacturing giant Siemens has launched its first bond on blockchain in an effort to streamline sales processes and reach potential buyers directly. The company announced the issuance of a digital bond worth US €60 million (USD $64 million) in a statement disseminated on February 14.
The bond in question was issued on the public Polygon blockchain and has a one-year maturity. Other details about the debt instrument, such as the interest rate, were not disclosed.
Siemens listed some of the benefits of leveraging blockchain technology to issue these types of instruments. Compared to the traditional process, the use of blockchain “makes global paper certificates and central clearing unnecessary,” according to the press release.
The issuance of the technology-based bond occurs thanks to regulations in Germany approved in 2021 via the Electronic Securities Act. Siemens has used the new possibilities of the Electronic Securities Act and sold the securities directly to investors without engaging established central securities depositories. Payments were made using classic methods as the digital euro was not yet available at the time of the transaction.
Peter Rathgeb, corporate treasurer of Siemens AG, added for his part that the use of the blockchain allows operations to be executed much faster and more efficiently, compared to the traditional system. He announced that the company plans to continue “actively” promoting this development.
Global Manufacturing Giants Embrace The Blockchain
The move by Siemens is significant because it is one of the world’s pre-eminent diversified manufacturing conglomerates. The company operates in a wide range of industries, including energy, healthcare, transportation, and manufacturing.
Siemens operates in over 200 countries and employs more than 300,000 people worldwide. The company’s products and services include power generation and distribution systems, medical equipment, transportation systems, building automation, and industrial automation solutions. Siemens is also involved in research and development in areas such as artificial intelligence, cybersecurity, and renewable energy.
In recent years, Siemens has focused on digitalization and has developed a number of digital solutions for various industries. For example, the company’s MindSphere platform provides data analytics and connectivity for industrial applications, and its Simcenter software helps engineers simulate and test products in a virtual environment.
The company was founded in Berlin, Germany, in 1847 by Werner von Siemens and Johann Georg Halske, and it has since grown to become one of the largest engineering companies in the world.