In a major positive boost for Web3 and DeFi adoption in the traditional business spheres, behemoth German conglomerate and multinational company, Siemens AG has issued bonds worth €60 million on the Polygon blockchain network!

Siemens is a 175-year-old conglomerate in the industrial sector and is the largest industrial manufacturing company in all of Europe. The company wants to raise €60 million and has issued one-year bonds for the same under Germany's Electronic Securities Act, which came into effect in June 2021. With this new offering, Siemens has now become one of the first major multinational companies to issue a fully compliant digital bond on a blockchain network.

“With our innovative products and technologies, Siemens supports the digital transformation of its customers with great success. It is therefore only logical that we test and utilize the latest digital solutions in finance, too. We are proud to be one of the first German companies to have successfully issued a blockchain-based bond. This makes Siemens a pioneer in the ongoing development of digital solutions for the capital and securities markets,” said Ralf P. Thomas, Chief Financial Officer of Siemens AG.

Since the bond has been issued on the Polygon blockchain network, the need for an intermediary trusted third-party bank was completely removed and the bond was sold directly to three major investors - DekaBank, DZBank and Union Investment - directly through the protocol. However, while the bond was issued on-chain, the proceeds from the issue were collected through traditional banking channels.

Among the various benefits that the DeFi method provides for issuing bonds for companies - Siemens emphasized that this method has a few more benefits that they were trying to achieve - including removing intermediaries, going completely paperless and lowering transaction costs significantly.

“By moving away from paper and toward public blockchains for issuing securities, we can execute transactions significantly faster and more efficiently than when issuing bonds in the past,” said Peter Rathgeb, Corporate Treasurer at Siemens AG.

Read more: Total Value Locked in DeFi rallied by 6%

Polygon co-founder Mihailo Bjelic also took to Twitter to announce this major development, claiming that the whole procedure was carried out on-chain and without any need or involvement of the Polygon Labs in the matter - thus proving to be a true permissionless nature of decentralized finance (DeFi) platforms.

Hauck Aufhäuser Lampe Privatbank AG acted as the bond registrar for the transaction. Interestingly, this company also provides digital asset custody for the crypto wallet keys. Hauck Aufhäuser Lampe Privatbank’s digital asset unit is led by Simon Seiter who is popularly known for heading Deutsche Börse’s Digital Assets units for two years.

Polygon MATIC Price on the rise!

Thanks to this major development that indicates a step in the positive direction for mass DeFi and Web3 adoption - Polygon network's native crypto token MATIC price has been seeing some strong positive action too. While the overall crypto market cap lost about 3% in the past 24 hours, MATIC price is up nearly 4% in the same timeframe! Thanks to this, MATIC's price is now up a little over 85% since the beginning of 2023, practically one of the best recoveries amongst the top 15 crypto assets by market cap.

Welcome move

This comes as a welcome move in the decentralized finance sector as of late, there have been some regulatory headwinds in the space, just across the pond. In the US, on the other side of the Atlantic, the Securities and Exchange Commission cracked down upon Kraken crypto exchange for alleged irregularities in their staking service. And soon after we saw the New York Department of Financial Services ordering Paxos to immediately cease issuance of Binance's BUSD. Thus this move by Siemens to issue their €60 million bond on a decentralized finance platform like Polygon comes at an opportune time to bring about changes in the right direction - that regulations are welcome and at the same time, mass adoption of this truly novel technology can be achieved.

Values as on 17 February, 2023.

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