Siemens Issues €60M Digital Bond On Polygon

German industrial powerhouse Siemens AG has issued a 60M euro digital bond on the Polygon blockchain.

The storied 175-year-old conglomerate issued the one-year bond under Germany’s Electronic Securities Act, which came into effect in June 2021. The offering makes Siemens one of the first major multinationals to issue a fully compliant digital bond.

The bond was sold directly to three investors, DekaBank, DZ Bank, and Union Investment, without the need for an intermediary bank. While the bond was issued on-chain, proceeds were collected through traditional banking channels.

In what could be considered an endorsement of DeFi tenets, Siemens emphasized that it expects to realize multiple benefits from the move, including removing intermediaries, going paperless and lower transaction costs.

“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,” said Peter Rathgeb, Corporate Treasurer at Siemens AG.

Polygon co-founder Mihailo Bjelic tweeted that Siemens conducted the transaction without any involvement from Polygon Labs, a prime example of the permissionless nature of open finance.

Regulatory Headwinds

Siemens’ embrace of blockchain technology comes at a time when regulators have been cracking down on the crypto space.

On Feb.14, the New York Department of Financial Services ordered Paxos to cease issuing Binance’s BUSD, the 3rd largest stablecoin by market capitalization.

Last week, Kraken shut down its crypto staking service for US users. It subsequently paid a $30M fine levied by the SEC.

Polygon’s MATIC governance token MATIC is up over 40% in the past 30 days and has outperformed Ether, which rose 10% during the same period.