A German-based Blockchain firm, Bitbond announced that it has received a green signal from the regulators to issue security tokens offering (STO). Accordingly, BaFin, the German Federal Financial Supervisory Authority has approved Bitbond’s STO plea under the German Banking Act.
BaFin Approved Tokenized Bonds
Bitbond, the blockchain based lending enterprise is now the first firm in Germany to be regulated by BaFin and comply with transparent rules. Per the statement, Bitbond’s STO carries an issue volume of 100 million euros. Additionally, private investors can also participate in STO.
In an announcement, Radoslav Albrecht, Bitbond founder, and CEO notes that;
“We are the first regulated blockchain company to set new standards. It is important for us to show investors who trust our platform that we act according to transparent rules.
Bitbond claims that the interest of investors is highly turning the ways from tokens being structured as securities. Such security tokens of Bitbond is issued on Stellar’s blockchain. One who wish to invest in Bitbond’s STO, they can head up investment in Euro, Stellar Lumens (XLM), Bitcoin (BTC) or Ethereum (ETH) but ensure that the firm will provide returns in XLM.
Moreover, the press release admires the new investment product offered by Bitbond and adds that ‘it’s is innovation’. Consequent to the official announcement, it offers four percent as the annual interest rate on invested capital (1%/quarter). In addition to the four percent annual interest rate, the bond also carries the variable bonus every year. Nevertheless, the term of the bond counts for 10 years.
Bitbond believes to raise around €1 billion lending annually by 2022. In a similar matter, the CEO Albrecht speak in an interview with local media Handelsblatt. He says that while the firm can raise between €3 to €5 million, STO can boost these figures to up to €100 million.
Concerning BaFin’s decision, Philipp Sandner who is the head of the Blockchain Center at the Frankfurt School of Finance elaborates how important the BaFin’s decision for crypto is. He says;
The supervision acts undogmatically: Ordinary projects are approved, problematic ones prevented.
The local German media also revealed that regulators still have three more ‘prospectus examination in pending line’ – this was confirmed during an event by Thomas Eufinger, the Department Head of the Prospectus Examination at BaFin.
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