German State Bank Issues €100M Bond on Polygon – Is TradFi Finally Embracing Crypto?

NRW.BANK, a German state-owned development bank, has issued a €100 million ($116.7 million) blockchain-based bond on the Polygon network, marking a major public-sector step into digital securities.

The bond, with a two-year maturity, was issued under Germany’s Electronic Securities Act (eWpG). This legislation enables the issuance and registration of bonds entirely on blockchain networks, eliminating the need for physical certificates.

Cashlink Registers Regulated Bond on Polygon as eWpG Law Fuels DLT Adoption

The German bank used the infrastructure of Cashlink Technologies, a BaFin-licensed crypto securities registrar, to register the bond, with Polygon serving as the underlying blockchain.

According to the report, institutional investors such as Deutsche Bank, DZ BANK, and DekaBank took part in the offering, acting as joint lead managers.

“This is more than a technical milestone. It’s a signal that public financial institutions are ready to move beyond blockchain pilots and start integrating these systems at scale,” said Michael Duttlinger, CEO of Cashlink.

The bond marks the first time NRW.BANK has made a fully digital issuance of this kind, further reflecting growing confidence in blockchain for regulated capital markets.

Notably, Germany’s eWpG law, introduced in 2021, has created a clear legal path for the use of distributed ledger technology in securities. This has helped attract banks and public institutions toward tokenized finance. While still small in size compared to the traditional bond market, digital bond activity is accelerating.

Polygon’s involvement in the issuance also comes at a time when the network is preparing for a major technical upgrade. The Polygon Foundation is set to deploy Heimdall 2.0, a new consensus layer for its proof-of-stake blockchain.

Scheduled to go live on Thursday, the upgrade seeks to reduce finality time to just five seconds and enhance network resilience by minimizing the likelihood of chain reorganizations.

“This is the most technically complex hard fork Polygon PoS has seen since its launch in 2020,” wrote Sandeep Nailwal, CEO of the Polygon Foundation, on X.

He added that the upgrade would reduce the finality time to around five seconds and decrease the risk of chain reorganizations.

The coincidence of the bond issuance and the Polygon upgrade indicates the growing maturity of the blockchain infrastructure underpinning tokenized finance. Digital bonds offer advantages such as real-time tracking, faster settlement, and reduced administrative overhead, which are now attracting public-sector issuers.

Germany Advances Digital Bond Push as Banks and Industrials Embrace Blockchain

Germany is quickly emerging as a hub for regulated blockchain finance. Recent digital bond issuances by major institutions, including DZ BANK, DekaBank, Commerzbank, NRW.BANK, KfW, and Siemens, indicate the country’s accelerating adoption of tokenized securities, enabled by its 2021 Electronic Securities Act (eWpG).

Earlier this month, KfW, Germany’s state-owned development bank, issued a CHF 140 million digital bond via the SIX Digital Exchange (SDX) in Switzerland. Beyond banking, German industrial giant Siemens also entered the digital securities space. In February 2023, Siemens issued its first digital bond, worth €60 million ($64 million), on Polygon’s public mainnet.

Beyond digital bonds, Germany’s traditional banking sector is deepening its engagement with crypto. Sparkassen-Finanzgruppe, the nation’s largest banking group with over 50 million customers, seeks to introduce crypto trading services to its customers by mid-2026.

The move will be coordinated through Dekabank, a financial institution owned by Sparkassen, and will allow retail clients to buy and sell Bitcoin and Ether directly within the group’s mobile banking app.

The German Savings Banks Association confirmed the development, framing it as a response to the recently implemented EU Markets in Crypto-Assets (MiCA) regulation.

According to the group, the goal is to offer customers “reliable access to a regulated crypto offering.”

Sparkassen joins a growing list of German banks moving toward crypto adoption; for example, DZ Bank, the country’s second-largest lender, began testing trading and custody services for digital assets in 2023 through a partnership with Boerse Stuttgart Digital.

Similarly, Landesbank Baden-Württemberg announced plans earlier this year to launch crypto custody services for institutional clients in collaboration with Austrian exchange Bitpanda.

Meanwhile, Polygon continues its strategic pivot. Following the May 24 resignation of co-founder Mihailo Bjelic, leadership has been consolidated under Sandeep Nailwal, now acting as CEO of the Polygon Foundation.

Under Nailwal, Polygon seeks to sunset its underperforming zkEVM chain and refocus on core verticals, including real-world asset (RWA) tokenization, stablecoin payments, and its proof-of-stake (PoS) chain.

Despite a drop in market cap, from $20 billion at its peak to $1.7 billion, Polygon remains a key player in tokenization.

According to rwa.xyz, the network ranks 6th in total RWA value, with over $343 million in assets across 254 tokenized instruments. It also captures 37.7% of the entire tokenized bond market, signaling its continued relevance in institutional blockchain infrastructure.