NRW.BANK, a prominent state-owned development bank in Germany's North Rhine-Westphalia region, has issued a groundbreaking €100 million ($117 million) blockchain bond using the Polygon network. This marks Germany's first state-owned bank bond issuance on a public blockchain and the largest public sector digital securities transaction in Europe to date.
The two-year bond was formally registered as a crypto security under Germany's Electronic Securities Act (eWpG), providing legal certainty through BaFin, the country's financial regulator. The transaction was facilitated by licensed securities registrar Cashlink Technologies, with Deutsche Bank, DZ BANK, and DekaBank acting as joint lead managers.
Polygon was specifically chosen for its scalability as an Ethereum sidechain, EVM compatibility, and sustainability commitments aligning with institutional ESG requirements. Cashlink CEO Michael Duttlinger emphasized this represents more than a technical milestone: "Public financial institutions are now ready to move beyond blockchain pilot projects and integrate these systems at scale."
The issuance demonstrates how tokenization streamlines capital markets through automated settlements via smart contracts, reduced intermediaries, enhanced transparency via immutable ledgers, and potential fractional ownership. While challenges like cross-border regulatory harmonization remain, this sets precedent for broader institutional adoption of blockchain-based financial instruments.