Momentum for the issuing of Security Tokens is gathering pace in Europe with a Blockchain powered company called Bitbond, announcing it now has regulatory approval from BaFin (German Federal Financial Supervisory Authority) to launch a bond to raise up to Euros 100million using the Stellar Blockchain.In contrast to ICOs, the securities prospectus for token-based bonds gives investors transparency and comprehensively documents their rights and the terms of the offer. The bond is subject to BaFin’s regulatory control. Bitbond has been approved as an asset broker under the German Banking Act for its Blockchain-based lending business and is the first financial services institution of this type to be supervised by BaFin.
We have already seen BBVA the Spanish bank using Blockchain technology to issue a bond, as have NIVURA in London.
It is thought that issuing bonds on a Blockchain could reduce the issue costs by 50% to 70% so potentially small to medium size companies could start using the bonds to raise capital on Blockchains.
