Global law firm Baker McKenzie has advised BayernLB on the first fully digital issuance and settlement of a crypto security in central bank money. The commercial paper, with a volume of EUR 100 million, was issued by BayernLB as a crypto security under the German Electronic Securities Act (eWpG) and acquired by Siemens AG as an investor. From issuance and blockchain-based register maintenance through to payment, the transaction was completed fully digitally within minutes.
The settlement was carried out via PONTES, the Eurosystem's new infrastructure. BayernLB is one of the first seven institutions in Germany to be certified as a market participant for PONTES. The transaction marked the first time BayernLB used PONTES in a live transaction.
The commercial paper was transferred via SWIAT's private, permissioned blockchain, with SWIAT also acting as the crypto securities registrar. The corresponding payment was settled via PONTES. The two systems were connected through SWIAT's External Asset Synchronizer, enabling the security and central bank money to be transferred automatically and simultaneously.
Sebastian Dey and Dr Conrad Ruppel (Baker McKenzie, Banking & Finance, Frankfurt), who also led the transaction, commented: "We are delighted to have advised BayernLB on this innovative transaction. Combining a crypto security, distributed ledger technology and settlement in central bank money represents an important step forward in the development of the digital capital markets."
In addition to Siemens, DekaBank participated in the transaction as custodian bank and payment service provider, while Deutsche Bank acted as payment service provider for Siemens. SWIAT provided the blockchain infrastructure and acted as the crypto securities registrar.
In 2024, BayernLB had already supported and invested in a digital bond issued by Siemens AG as part of a series of Eurosystem trials. With the current transaction, BayernLB itself is now acting as issuer.