In July this year, NRW.BANK — the promotional bank for Germany’s largest state by population, North Rhine-Westphalia — issued its first bond on a blockchain. Although owned by the western German state, it primarily finances activities through its own revenues rather than state funds. These factors led the lender to think hard about how it would make a blockchain bond a reality.
Besnik Berisha, head of treasury at NRW.BANK, describes the motivation behind issuing the two-year €100mn bond as a journey to understand how blockchain transactions work, how market participants such as investors and banks behave, and how far the infrastructure has developed.