Tokenization in Frankfurt

Tokenization in Frankfurt started with the most classic instrument there is: the bond. KfW issued its first blockchain-based digital bond as a crypto security under the German Electronic Securities Act, with lawyers from the Frankfurt offices of Linklaters and Hengeler Mueller on the deal, as LTO reported (in German). NRW.BANK followed with a 100 million euro crypto security; DekaBank, Deutsche Bank and DZ BANK were joint lead managers. Natixis Pfandbriefbank issued the first digital registered covered bond on the SWIAT blockchain, 100 million euros that DekaBank bought (Clifford Chance).

Siemens issued a 300 million euro digital bond on SWIAT's blockchain, settled in central bank money through the Deutsche Bundesbank's Trigger Solution, and the first secondary trade in it ran on 360X with DekaBank and Union Investment. The European Investment Bank then issued the first DLT-native commercial paper on Clearstream's D7 DLT: 77.5 million euros for ten business days, with Citi as dealer and DekaBank, DZ BANK, Eurex Clearing and Union Investment among the buyers. The page on tokenized bonds explains how such an issue is built.

Every step has a Frankfurt address. The register comes first: Cashlink, headquartered in Frankfurt, was the first licensed crypto securities registrar in Germany and also holds a crypto custody license. Custody of the private keys follows; Crypto Finance (Deutschland), part of Deutsche Börse Group, and Commerzbank hold BaFin licenses for it. Trading needs a venue: 360X, backed by Deutsche Börse and Commerzbank, is one of the few firms licensed under the EU DLT Pilot Regime and also lists tokenized equities, the xStocks on US shares and an S&P 500 ETF, and 21X runs trading and settlement under the same regime.

Settlement and collateral close the loop. The Eurosystem's Pontes settles DLT-based wholesale transactions in central bank money. DekaBank and Eurex Clearing pledged the EIB's DLT commercial paper through Clearstream to borrow from the Bundesbank, and Eurex Clearing runs a DLT-based collateral service with HQLAX, first used by J.P. Morgan to move securities for the pension investor PGGM. The answer What are tokenized securities? covers the legal side.

The first topic is scale. Most Frankfurt issues so far were single deals, and the question now is whether banks move their regular issuance onto a ledger. SWIAT, the blockchain behind the Siemens and Natixis bonds, is moving its network into Regulated Layer One, a European cooperative founded by banks from Germany, the Netherlands, France and Spain, with Linklaters advising. At EU level, the Commission has proposed to widen the DLT Pilot Regime, which the page on RWA tokenization in Europe describes.

The second topic is the cash leg. A bank can pay for a tokenized bond with central bank money through Pontes, with tokenized deposits or with a euro stablecoin such as EURAU from Frankfurt-based AllUnity, and each route has different risk and accounting. The third is the paperwork: terms, register rules and custody contracts, drafted by the Frankfurt teams of the large law firms, as the page on law firms for digital assets shows.

Finance Loop is the meeting place in Frankfurt for people who issue, register, hold and trade tokenized securities. It connects the finance, IT and AI communities in Germany, Austria and Switzerland, with events in Frankfurt, Munich, Berlin and Hamburg, and its Frankfurt events are open to the whole Rhine-Main area, from Eschborn and Offenbach to Wiesbaden, Mainz and Darmstadt.

21X and Finance Loop have a strategic cooperation for joint events and knowledge sharing on onchain market infrastructure. Finance Loop has been a partner of the Crypto Assets Conference and the Forum für Digitale Vermögenswerte, and it announced the Frankfurt Forum on Digital Assets & Applications of d-fine, where DekaBank, 360X, 21X and Seturion discussed DLT market infrastructure. Before one Crypto Assets Conference, CoreLedger, Finemetal and S-Pro explained at a real-world asset evening at TechQuartier how to tokenize gold and real estate. Finance Loop hosted the Digital Finance Night, where tokenization, stablecoins and custody were on the agenda for institutional guests, and it is a partner of Frankfurt Digital Finance, whose first day covered tokenized finance. At Capital & Code, Standard Chartered Luxembourg, the Solana Foundation, Allfunds Blockchain and Utila discuss how funds are distributed and traded on institutional blockchain rails.

Yes. Tokenization fills much of the program of the Crypto Assets Conference at Frankfurt School, and the Frankfurt Forum on Digital Assets & Applications of d-fine is a conference on DLT-based capital markets. Tokenization meetups and networking evenings take place at TechQuartier; dates are in the calendar above and on the events calendar.

A crypto securities register is the ledger in which a security issued under the German Electronic Securities Act exists without a paper certificate. Keeping one is a financial service that needs a BaFin license under the Banking Act. Cashlink in Frankfurt was the first licensed register keeper in Germany.

On 360X and 21X, the two Frankfurt venues licensed under the EU DLT Pilot Regime. 360X carried out the first secondary trade of the Siemens digital bond and lists tokenized equities. 21X runs trading and settlement of tokenized securities on one ledger.

Frankfurt teams of Linklaters, Hengeler Mueller, Clifford Chance and Norton Rose Fulbright advised on the digital bonds of KfW, NRW.BANK and Natixis Pfandbriefbank, and Bird & Bird has its Frankfurt office on Marienstraße. The comparison of law firms for digital assets names more.