DekaBank Issues Digital Bond Without Intermediaries in ECB Trials

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Hongji Feng

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Hongji Feng

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Hongji is a crypto and tech reporter. He graduated from Northwestern University's Medill School of Journalism with a Bachelor's and a Master's. He has previously interned at HTX (Huobi Global),...

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July 11, 2024 18:52 EDT

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DekaBank announced on July 11 that it issued a digital bond directly to Melzer Bank using the European Central Bank’s Distributed Ledger Technology (DLT) settlement trials.

According to a recent report by Ledger Insights, DekaBank issued the digital bearer bond without using a central securities depository as part of the ECB’s wholesale DLR settlement trials.

New Digital Bond Issued by DekaBank

Germany’s electronic securities legislation and the Bundesbank’s trigger solution enabled the transaction, allowing a seamless delivery versus payment settlement.

The report suggested that Germany’s eWpG legislation facilitates the issuance of crypto securities without traditional intermediaries but mandates the involvement of a BaFin-regulated crypto registrar.

This registrar acts as a legal entity responsible for maintaining the registry of security holders when the issuance is conducted on a blockchain.

DekaBank, recently licensed as the first bank to serve as a crypto registrar under this framework, managed the registry for this digital bond issuance. This role could ensure an updated and accurate list of bondholders is maintained.

“Blockchain-based securities transactions can be carried out faster and more transparently than the classic settlement infrastructure,” said DekaBank Head of Treasury Silvio Lenk. “Payment transactions with digital central bank money are essential for this and close the previous gap. The ECB’s step to offer solutions here will enable further development of this market. For us, it is a must to participate in this.”

German Government Transfers Another 1,125 BTC

The German government has been making large Bitcoin transfers to exchanges. On July 11, it transferred over 1,125 Bitcoins to exchanges, moving 375 BTC ($21.8 million) each to Bitstamp, Kraken, and Coinbase.

🤨🇩🇪 All very weird, a majority of the $BTC Germany sent to CEXs today were returned

Kraken: 767 $BTC returned of 975 sent (53%)
Bitstamp: 1575 $BTC returned of 1893 (120%)
Coinbase: 738 $BTC returned of 1075 (69%)

Either no liquidity…or deliberate obfuscation of the flows https://t.co/VCEebqtA0E pic.twitter.com/iIXlGo55j9

— Rho Rider (@RhoRider) July 11, 2024

In addition the government transferred 1,000 BTC ($58.1 million) to a B2C2 Group wallet, known for market making and over-the-counter (OTC) services, along with an additional 250 BTC ($14.5 million) to an institutional deposit address.