The finance sector worldwide is increasingly exploring blockchain technology, which offers permanent transaction records and reduces reliance on centralized Web2 servers. Germany’s Kreditanstalt fuer Wiederaufbau (KfW), the third-largest state-owned bank, is now joining this trend by planning to issue its first blockchain-based digital bond. This move not only marks KfW’s entry into blockchain but also aims to drive wider adoption of the technology.
The bond KfW plans to issue will be tokenized, essentially creating a virtual representation of the bond on a blockchain to validate its transactional history and ownership. Tokenization offers several advantages, including the automation of interest payments and maturity settlements, as well as reducing the need for intermediaries, thereby cutting overall transaction costs.
Melanie Kehr, Member of the Executive Board of KfW Group, described the planned bond issuance as a “crypto security” and emphasized the bank’s commitment to innovation.
Source: gadgets360.com
