Exclusive Content:

Scania lanserar digital tjänst för hela flottan...

Write a detailed and engaging article about Scania lanserar...

Jeg ønsker ikke å være kollegaens referanse,...

Write a detailed and engaging article about Jeg ønsker...

Primăria Alba Iulia scoate la licitație PRIMA...

Write a detailed and engaging article about Primăria Alba...

Berlin Hyp Launches First Digital Mortgage Bond on Private Blockchain

Berlin Hyp, a leading real estate financier, has recently made a significant move in the financial industry by issuing its first digital mortgage bond on a blockchain. This bond, with a substantial volume of 100 million euros and an attractive yield of almost 3 percent, operates on the private blockchain of SWIAT. Noteworthy financial institutions such as DekaBank and LBBW are also key participants in this groundbreaking initiative.

Legislative Foundations and the Role of SWIAT

Several years ago, the German government introduced the Electronic Securities Act (eWpG) to facilitate the digitization of securities, including those based on blockchain technology. While progress under this law has been slow, Berlin Hyp’s recent issuance of a digital mortgage bond represents a potential milestone in this journey towards digital securities. As a subsidiary of LBBW, Berlin Hyp specializes in real estate and mortgage bonds and aims to become the most modern real estate financier in its sector. The introduction of the „Blockchain Pfandbrief“ aligns with this vision, demonstrating their commitment to leveraging cutting-edge technology.

Structure and Benefits of the Digital Mortgage Bond

The digital mortgage bond issued by Berlin Hyp serves as a debt security used to refinance mortgage loans, with multiple loans bundled together and utilized as collateral. Backed by Berlin Hyp’s strong creditworthiness, this bond offers a competitive 2.75 percent interest rate over a three-year term. What sets this bond apart is its issuance via a blockchain, specifically the private blockchain of SWIAT, a subsidiary of DekaBank. SWIAT’s blockchain is decentralized and compatible with Ethereum smart contracts, but remains closed to the public. By joining SWIAT, LBBW facilitates the integration of Berlin Hyp’s mortgage bond into the private blockchain ecosystem, potentially streamlining settlement and clearing processes.

Role of Key Stakeholders and Market Dynamics

Under the current legal framework, DekaBank serves as the crypto securities registrar, while both DekaBank and LBBW are registered as holders of the bond. They are responsible for providing liquidity in secondary markets and ensuring over-the-counter trading. Bankhaus Metzler, a crypto-active bank, supported the initiative as an anchor investor. Despite its innovative nature, the blockchain variant of the bond presents challenges, such as complexity for some investors and limitations on trading due to current legislation on electronic securities. However, the bond’s strong presence in over-the-counter trading mitigates some of these challenges.

Future Implications and Regulatory Considerations

The issuance of the bond on the SWIAT blockchain represents a step towards modernizing financial technology. However, the use of a closed blockchain may dampen enthusiasm for the innovation, as it restricts clients‘ access to the transparency and autonomy of public blockchains. The legal framework incentivizing the use of closed blockchains raises concerns about the future of electronic securities and their impact on transparency and market dynamics. Overall, Berlin Hyp’s issuance of a digital mortgage bond on a private blockchain signifies a significant advancement in the application of blockchain technology in finance, highlighting both the potential and challenges of integrating cutting-edge technology into traditional financial systems.

Latest

Newsletter

Don't miss

Scania lanserar digital tjänst för hela flottan – Börsvärlden

Write a detailed and engaging article about Scania lanserar digital tjänst för hela flottan  Börsvärlden. The article should be structured with clear distinct paragraphs, each...

Jeg ønsker ikke å være kollegaens referanse, skriver leseren. Slik sier du nei, svarer eksperten. – E24

Write a detailed and engaging article about Jeg ønsker ikke å være kollegaens referanse, skriver leseren. Slik sier du nei, svarer eksperten.  E24. The article...

Primăria Alba Iulia scoate la licitație PRIMA PARCELĂ de teren din zona economică a municipiului: Perioada de concesionare, preț de pornire și obligațiile concesionarului...

Write a detailed and engaging article about Primăria Alba Iulia scoate la licitație PRIMA PARCELĂ de teren din zona economică a municipiului: Perioada de...