Europe’s Oldest Bank To Offer Stellar-Based Tokenized Securities

Europe’s oldest bank based in Germany, Bank Von der Heydt, works on a special-purpose euro stablecoin that will be able to facilitate placements in tokenized securities and will use the help of Stellar as per the announcements that we have today in our Stellar lumens news.

The Munich-based bank which was established in 1754, probably Europe’s oldest bank, made the announcement back on Monday that it partnered with the financial services provider BitBond and will integrate the tokenization into its established securitization platform. The partnership will also allow the bank to tokenize digital securities on the Stellar blockchain which can offer a lot of advantages for the institutional clients via private placements.

Tokenization can simplify equity sales and can eliminate a lot of the associated frictional costs according to the bank. One of the bank representatives wrote on Monday:

‘’Tokenization can simplify equity sales and eliminate much of the associated frictional costs, according to the bank. “[S]ecurities can be traded directly without an intermediary, making financing much cheaper and less complicated.’’

There are no plans yet for the bank to enable wider public access to the platform. All of the clients will be able to securely store tokenized equity in a custody solution that is developed by BitBond and von der Heydt in 2019. The solution will get approval from the German financial regulator BaFin after the changes in the laws that are meant to provide a license to continue offering cryptocurrency custody. The investors will also be able to purchase tokenized equity by using the euro stablecoin with the help of Stellar that will also be issued by the bank. The Clients will be able to convert their euros into stablecoin which can also be stored in the custody solutions of the bank.

Radoslav Albrecht, who is a founder of Bitbond and CEO, explained:

“Digital euro payments will happen much faster, there will be a real-time, on-chain DvP (delivery versus payment of securities) and the bank doesn’t need to involve a third-party paying agent but can provide everything independently.”

BitBond received approval by BaFin for its tokenized bond back in January 2019, going on to launch Germany’s first regulated security token offering later in the year. It was established in 2013 and the company originally operated as a blockchain-based lending platform for smaller firms and raised $5 million in 2017 to finance these loans.