The Eurosystem’s DLT settlement trails in central bank money were a massive boost to German tokenization issuances. Across all jurisdictions the total amount of transactions was €1.59 billion. German digital securities issuances in the second half of 2024 totaled €615 million, compared to a total of €235 million cumulatively in up until then. That’s according to the latest Deka Digital Asset Monitor.
The first issuances under Germany’s Electronic Securities Act (eWpG) were in the second half of 2021. The law distinguishes between crypto securities which are more decentralized, versus those issued via a central securities depository (CSD). Hence, the €8.5 billion in digital bonds issued by KfW in 2024 via the centralized version of Clearstream’s D7 are not crypto securities and excluded from the above figures.
While the Euro value of issuances shot up, the number of issuances did not – it was 35 in both H1 and H2. The big difference is the first half of the year was dominated by smaller SME issuances, whereas there were more institutions and large issuances in the second half, including the €300 million Siemens digital bond and a €100 million issuance from Berlin Hyp with two issuances totaling €150m from KfW.
The vast majority of issuances are for bearer digital bonds as opposed to funds or registered securities.
Polygon is popular
Hence, while Cashlink and Smart Registry (Nyala) are by far the most prolific issuers, with almost 90 issuances between them, the SWIAT blockchain platform now hosts the most value because it helped with several of the bigger issuances. SWIAT was founded by Dekabank and is backed by LBBW and Standard Chartered, amongst others. While it uses a permissioned blockchain (Hyperledger Besu), Cashlink and Smart Registry tend to use public blockchains and favor Polygon. As a result, the Polygon blockchain dominates issuances, accounting for 22 out of the 35 in the second half, and 80 in total.
The European Central Bank is expected to announce some sort of ongoing settlement solution in the next few months.
