German real estate giant issues debt via Stellar blockchain

  • For the first time, Real Estate company Vonovia has issued a digital bond in the amount of 20 million euros.
  • The transfer of ownership rights to the real assets was regulated via security tokens issued on the Stellar blockchain.

The German real estate group Vonovia, which is headquartered in Bochum, owns more than 400,000 apartments in Germany, Austria and Sweden. In order to further expand the digitalization of its financial operations, the housing company has issued its first fully digital registered bond in the amount of €20 million.

The bond has a total term of 3 years. Security tokens were used for the issue to transfer ownership under the highest security standards. For the actual settlement of the transaction and the transfer of ownership, the tokens were issued on the Stellar Blockchain. In the process, Vonovia independently launched the token via the online marketplace firstwire.

firstwire is a platform that brings issuers and investors together directly and in real time. The company had already placed a promissory note loan in the amount of € 50 million on the platform in September 2019. In mid-December 2020, the German federal cabinet had approved a new draft law for the introduction of electronic securities, which is intended to further advance the digitalization of Germany’s financial center and fulfill the central requirement of the blockchain strategy for more transparency, market integrity and investor protection.

Helene Roeder, Chief Financial Officer of Vonovia, explains that the use of blockchain is to be driven forward:

We want to try out the new technology to gain experience. We can well imagine that it will play a significant role in the capital market in the future. Issues are transparent and traceable in real time, which guarantees a professional transaction standard. It also allows us to reach new investors globally.

One of the first investors in firstwire’s marketplace is banking giant Warburg. Joachim Olearius, spokesperson for the partners of the owner-managed M.M. Warburg bank, describes that tokenization will significantly expand the range of services offered by banks:

Tokenization will significantly expand and structurally change the range of financial products and services. We are pleased to have successfully completed this transaction with an experienced issuer. It underlines the innovative strength of our bank.

Michael Greiner, CEO and founder of the online marketplace firstwire sees the first transaction as an important milestone that marks the use of tokens by institutional investors and can change the financial market in the long term.

Against the backdrop of the draft legislation for electronic securities, this transaction shows how bond issues can also be structured in the future. On firstwire, companies can now digitally close their issues in real time, which means immediate settlement and no more multi-day settlement risk.

The marketplace realized the technological implementation with its cooperation partner Bitbond, which offers the first blockchain bond in Germany in the form of a security token offering for investors.

Adaptation of Stellar blockchain continues to rise

As CNF reported, more than 800 companies rely on Stellar’s technology to offer a wide variety of products and financial services. In the first week of January, it was announced that Ukraine has signed an agreement with Stellar Development Foundation to develop a national Central Bank Digital Currency (CBDC). As a result, the price of XLM has risen massively. Within the last 24 hours, XLM recorded a 3% increase in price and was trading at a price of USD 0.30 at the time of writing.

About Author

Collin is a Bitcoin investor of the early hour and a long-time trader in the crypto and forex market. He's fascinated by the complex possibilities of blockchain technology and tries to make matter accessible to everyone. His reports focus on developments about the technology for different cryptocurrencies.

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