KfW, Germany's leading development bank, is partnering with Boerse Stuttgart Digital to issue a digital bond on blockchain, as part of the European Central Bank's experiments to explore asset tokenization and modernize financial processes.
ECB experiments with asset tokenization through Boerse Stuttgart Digital
In recent years, traditional financial institutions have gradually adopted innovations in the cryptocurrency sector, notably by offering custody services or creating investment funds such as the spot ETFs launched earlier this year.
More recently, the cryptocurrency market has seen a growing craze for the tokenization of real-world assets, also known as “Real World Assets” (RWA).
⛓️ Further reading – What is tokenization and which sectors is it transforming?
What is tokenization?
Tokenization is the process of converting physical or financial assets into digital equivalents on a blockchain, making them easier to integrate into distributed systems like Ethereum. This process gives the assets similar benefits to cryptocurrencies, such as improved traceability, faster transactions, and enhanced security by holding the assets in an address protected by a private key.
Recently, Boerse Stuttgart Digital, Europe’s leading infrastructure provider for digital assets, has announced a partnership with Kreditanstalt für Wiederaufbau (KfW), Germany’s largest development bank.to provide it with an infrastructure enabling the issuance of its new blockchain-based bond.
This partnership will provide KfW with all the necessary tools to manage its portfolios and secure its private keys during the asset issuance and redemption processes.in accordance with the German Electronic Securities Act (eWpG).
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A European-wide initiative
This initiative is also part of the trials and experiments on decentralised applications carried out by the European Central Bank. (ECB).
On this occasion, Gaetano Panno, Head of Transaction Management at KfW, said:
“As one of the largest and most active bond issuers in the world, we are actively pursuing digitalisation initiatives in the issuance and settlement process. The use of new technologies in the ECB trials allows us to technically process a ‘delivery versus payment’ transaction and thus support our digital learning journey.”
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Boerse Stuttgart Digital is the digital assets subsidiary of Boerse Stuttgart, Europe's 6th largest stock exchange group. The company offers various cryptocurrency-related services, such as a trading appmanagement of the BSDEX trading platform, secure custody services, and the development of physical asset tokenization.
By providing its services to KfW, Boerse Stuttgart Digital strengthens its position as a fully regulated European player in the field of cryptocurrencies and digital assets, and confirms its role as a trusted partner to connect traditional finance to blockchains.
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Source: Boerse Stuttgart Digital
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First attracted by the lure of gain, I am now trapped deep into the rabbit hole. With no way out, I have no choice but to share my knowledge and transmit the passion I have for the blockchain universe. I am also the creator of Adopt a Block, an educational site dedicated to Bitcoin.
Marius Farashi Tasooji
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