German development bank KfW is planning to issue another blockchain-based DLT bond in June 2026 of at least €100 million, with the aim of experimenting in a couple of important areas. In 2024, as part of the European Central Bank’s (ECB’s) wholesale DLT settlement trials, it issued two bonds on the Polygon blockchain, one for €100 million and the other for €50 million. It has also issued a CHF 140m digital bond on the SIX Digital Exchange (SDX) in June 2025.
With the latest issuance the bank will explore moving the bond to a different blockchain and changing the registrar. The initial bond issuance will follow the same path as the two 2024 bonds, which were issued on Polygon with Cashlink as the registrar. Germany’s eWpG legislation allows for a blockchain registrar to log issuance records instead of a CSD. As part of the experiment DekaBank will take over from Cashlink as registrar and the bond will be transitioned to the SWIAT / Regulated Layer One (RL1) permissioned distributed ledger.
While the announcement outlined the plans, it did not elaborate on the reason. So far KfW’s DLT bonds have been short dated. Given that the number of blockchains are proliferating, who’s to say which ones will be popular in five or ten years’ time. So for longer term bonds, there is a possibility of migrating to another blockchain. Another trend that KfW is not currently exploring is the potential for issuance on multiple chains simultaneously. There is also a risk that a blockchain fails for some reason, so this trial provides a disaster recovery avenue.
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