Germany’s State-Owned Bank KfW Taps Boerse Stuttgart for Blockchain-Based Digital Bond
Germany’s major developmental state-owned bank, Kreditanstalt für Wiederaufbau (KfW), took a huge step into the digital age. It has recently confirmed its alliance with Boerse Stuttgart Digital, which is the digital asset branch of Boerse Stuttgart exchange group, to bring a new blockchain-based digital bondto a new life.
Driving Digitization Initiatives with ECB
Through a press release on August 12, Boerse Stuttgart Digital introduced the main wallet management service and private key security, which is to be realized in the issuing and redemption of the bond. This new bond which is scheduled for a later issue, similar to the regulations of the German Electronic Securities Act (eWpG), will be digitally issued.
And this is also the reason this partnership is vital for both KfW and Boerse Stuttgart Digital concerning the European Central Bank’s (ECB) ongoing trials aiming at the settlement of blockchain-based financial transactions using central bank digital currency (CBDC). Boerse Stuttgart Digital already became a part of these trials in June 2024, which proved its important role in the promotion of the digitalization of the financial markets crosswise Europe.
Dr. Gaetano Panno, Managing Director – Transaction Management at KfW, has expressed his view on the matter and pointed out, “Standing out as one of the largest and most active bond issuers in the world, we are promoting digitisation including the issuance, and the subsequent settlement process. The implementation of new technologies within the ECB experiments allows us to practically execute a ‘delivery vs. payment’ transaction and thus is conducive to our digital learning process both individually and organization-wide”.
First Blockchain-Based Bond in Germany
KfW has been a pioneer of Germany’s path to digital securities. In July 2024, the bank parted with a €100 million digital bond which was developed on the Polygon (MATIC) blockchain. The bond was released on December 10, 2025, with a coupon at 3.125%. It was the first syndicated blockchain-based digital bond in Germany.
The implementation was led by a collaborative group of the top banks in Germany, including DZ Bank, LBBW, Deutsche Bank, and Bankhaus Metzler, and it was obviously not a single play but one that involved the entire spectrum of German banking. Major investors such as Berliner Volksbank, Deka Bank, and Union Investment stood out as the decisive contributors for the bond’s successful debut.
Bundesbank Tech for Digital Bonds
Within the future, KfW and Boerse Stuttgart Digital will leverage advanced technology in the issuance of their next bond security as part of the ECB’s digital trial. They would use “Trigger Solution,” a technical framework developed by Bundesbank, the Bank of Germany. This solution will operate unbrokenly by blockchain-based securities with traditional European payment systems like ‘Target2.’, thus ensuring the efficient and secure processing of digital securities.
Bundesbank’s solution has been successfully adopted by other leading financial institutions, including Clearstream, Deka Bank, and DZ Bank. This fact is proof that the market and the finance sector are going towards the use of interoperable systems.
Melanie Kehr, Member of the Executive Board of KfW Group, pointed out the sodal importance of such initiatives with the following statement, “Digitalization of the finance industry has a significant role in the European financial market international competitiveness. Our highest priorities include taking a front seat in the digital securities market’s establishment and development of such a market in Germany and Europe” Manfred speaks. Besides setting the rules of the game and for the next few days, the bank will not be able to conduct any transactions in CHF due to a long holiday.” .
The collaboration of KfW and Boerse Stuttgart Digital connects the chain, which is a significant step in Germany’s monetary industry’s revolution as the country becomes the pioneer of blockchain technology incorporation into traditional banking.
