Germany’s KfW has invested US$11 million on digital mortgage bond Pfandbrief, reports CoinGeek. Launched by Berlin Hyp, the product was issued in 2024 under the German Electronic Securities Act (eWpG) as a part of the European Central Bank’s (ECB) DLT settlement trial. CoinGeek describes the move as a “pivotal moment for traditional finance” in embracing Web3 solutions.
The transaction took place over-the-counter without a CSD, with DekaBank acting as seller, market maker, and custodian.
KfW group treasurer Tim Armbruster reveals to CoinGeek that as a “very active capital market participant”, KfW wants to “put a strong emphasis on digitalisation by highlighting innovation opportunities as an issuer and as an investor”. The transaction was motivated by “dwindling liquidity in the secondary market”, which has created a “lucrative market opportunity”.
“KfW is pushing for robust secondary markets with deep liquidity and central bank settlement solutions”, writes CoinGeek. The bank “advocates for regional central banks to recognise digital securities for collateral purposes to provide regulatory clarity for market participants”. A collaborative European network, the bank believes, would be a moving factor for the local industry.
