Capital markets News

Three German institutions use Deka’s blockchain savings bank bond platform

bonds blockchain dlt

Today DekaBank, the German securities provider for savings banks, announced that three savings banks have deployed digital savings bank bonds using the SWIAT blockchain platform. The savings banks of Dortmund, Ludwigsburg, and Schwarzwald-Baar issued the bonds using the DLT registry. 

One of the key benefits of the solution is the speed of settlement. Whereas the assignment of title with the paper-based version took up to seven days, it is now possible within seconds.

“Thanks to the faster process compared to the classic product, the digital savings bank letter enables faster and more efficient refinancing. This makes the product more attractive for issuers,” said Sebastian Junker, Deputy Board Member of Sparkasse Dortmund, and Dieter Wizemann, Board Member of Kreissparkasse Ludwigsburg.

According to Deka, this also improves the tradability of the bonds. However, other digital securities issuers have found the opposite because often the investor has to integrate with the blockchain platform. SWIAT says it provides a front-end user interface and an API layer for integration with legacy systems.

DekaBank is the founder of SWIAT, which announced a funding round in January that included LBBW and Standard Chartered alongside software firm Comyno.

“Following the issuance of digital securities, the digital savings bank bond is the next step in Deka’s digitization strategy. The digital savings bank bond is the first blockchain-based product that has reached full market maturity,” said Martin Müller, a member of the Deka Board.

Meanwhile, the European Investment Bank (EIB) has been the most prolific issuer of digital bonds to date. The executive responsible for the issuances recently discussed what’s needed for the market to reach maturity.