NRW BANK, the development bank of North Rhine-Westphalia, announced the issuance of blockchain-based bonds worth €100 million. This event marks one of the largest moves by the public sector into digital securities in Europe.
First Bond Issuance by NRW BANK
The two-year bond was issued on the Polygon blockchain and registered through the infrastructure of Cashlink Technologies, a cryptocurrency securities registrar licensed by Germany’s financial regulator, BaFin. This is NRW BANK’s first bond issuance as a fully digital crypto security under Germany’s Electronic Securities Act (eWpG).
Technological Foundation and Participation of Other Banks
Deutsche Bank, DZ BANK, and DekaBank participated in the issuance as joint lead managers. This points to substantial involvement from major banks in transitioning to digital securities.
Significance of New German Legislation
The eWpG law, which came into force in 2021, provided the legal basis for recording securities on distributed ledger technologies (DLT) in Germany, which has one of the largest capital markets. As stated by Cashlink CEO Michael Duttlinger: "This is not just a technical milestone; it’s a sign that public financial institutions are now ready to move beyond blockchain pilot projects and integrate these systems at scale."
The issuance of NRW BANK’s bonds on the blockchain highlights the increasing readiness of both public and private financial institutions to embrace digital technologies, potentially altering the landscape of investment and asset management.
