The release is a component of the wholesale DLT settlement trials conducted by the European Central Bank.
Siemens, a German technology company, has used the SWIAT permissioned blockchain to issue its second digital bond, worth €300 million.
Using Germany’s Trigger solution, which automates central bank payments through the TARGET 2 system, the one-year bond was settled in a matter of minutes.
This rapid settlement stands in stark contrast to Siemens’ previous €60 million bond issued on the Polygon blockchain, which required a two-day settlement, the company said in a recent press release.
The issue is a component of the wholesale Distributed Ledger Technology (DLT) settlement trials being conducted by the European Central Bank (ECB).
Siemens Chief Financial Officer Ralf P. Thomas stated, “By issuing another digital bond, we are demonstrating once again our spirit of innovation and underscoring our aim to continuously drive digital solutions for the financial markets.”
Largest eWpG Bond to Date
According to Germany’s Electronic Securities Act (eWpG), the bond is the biggest eWpG bond ever issued and is classified as a crypto security.
The entire amount of eWpG digital securities issued by June 2024 is projected to be €236 million; the ECB’s trials have allowed this amount to increase. Since then, two digital bond offerings totaling €150 million have been released by state-owned bank KfW.
eWpG digital bonds still need a registrar to keep track of asset holders even though they are frequently referred to as bearer bonds.
In this case, DekaBank, one of the investors, serves as the bond registrar.
Helaba, LBBW, DZ BANK, and BayernLB were among the other significant investors. Deutsche Bank handled settlement by utilizing the Bundesbank Trigger Solution.
“Automated processing within a few minutes shows the enormous potential of this new technology and confirms our strategy of playing a leading role in continuously shaping the digital transformation,” Peter Rathgeb, Corporate Treasurer at Siemens AG, said.
Tokenized Asset Market Could Reach $1.3T by 2030
A recent prediction indicating tokenized real-world assets (RWAs) could reach an astounding $30 trillion by 2030 has been questioned by some in the cryptocurrency community.
Jamie Coutts, chief cryptocurrency analyst at Real Vision, is one of the critics; he thinks a more realistic valuation is closer to $1.3 trillion.
Coutts noted that the market could reach $1.3 trillion by 2030 if tokenized assets continue to grow at the current compound annual growth rate (CAGR) of 121%.
Tokenization, Blockchain Fee Income & #Ethereum
— Jamie Coutts CMT (@Jamie1Coutts) August 26, 2024
Wall Street projects that $10 to $30 trillion in traditional assets will be tokenized over the next 5 to 10 years. That seems overly optimistic, considering BlackRock, the second-largest asset manager, has $10 trillion in AUM.… pic.twitter.com/vnhw0StW6V
Coutts’ cautious outlook is echoed by other industry experts.
Despite having a “cold start,” tokenized financial assets are predicted to reach a $2 trillion market by 2030, according to a recent McKinsey & Company report.
According to a report by the Boston Consulting Group and the Global Financial Markets Association (GFMA), tokenized illiquid assets are expected to be worth $16 trillion globally by 2030.
Citigroup has provided even more conservative estimates, indicating that by 2030, tokenized digital securities could be valued between $4 trillion and $5 trillion.
Major corporations are moving significantly in the tokenization space as a result of realizing this potential.
Goldman Sachs, for instance, plans to launch three new tokenization products later this year, driven by growing client interest.