Today DekaBank said it issued a ‘crypto security’, a digital bearer bond, without the use of a central securities depository or other intermediaries. The bond was bought by Bankhaus Metzler using central bank money, as part of the European Central Bank’s (ECB) wholesale DLT settlement trials. The Bundesbank’s trigger solution made it possible to execute a delivery versus payment transaction.
Germany’s electronic securities legislation, eWpG, supports the issuance of crypto securities without the usual intermediaries. However, it requires a BaFin regulated crypto registrar. When issuing a security on a blockchain, the crypto registrar provides a legal entity responsible for the registry entries. So they ensure there’s an up-to-date list of holders. In this case, that was also DekaBank which was recently the first bank to receive such a license.
DekaBank also founded the SWIAT institutional blockchain network where LBBW and Standard Chartered’s SC Ventures are co-investors. The bond was issued on the SWIAT network, which has now onboarded 24 institutions. SWIAT integrated its blockchain with the Bundesbank’s trigger solution to support the payment.
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