NRW.BANK Issues €100 Million Blockchain Bond on Polygon Network

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 significant step into digital securities for the public sector. The bond, with a two-year maturity, was issued under Germany’s Electronic Securities Act (eWpG), which allows for the issuance and registration of bonds entirely on blockchain networks, eliminating the need for physical certificates. The bank utilized the infrastructure of Cashlink Technologies, a BaFin-licensed crypto securities registrar, to register the bond, with Polygon serving as the underlying blockchain.

Institutional investors such as Deutsche Bank, DZ BANK, and DekaBank participated in the offering, acting as joint lead managers. Michael Duttlinger, CEO of Cashlink, highlighted the significance of this move, stating, “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.” This issuance reflects growing confidence in blockchain for regulated capital markets and is the first fully digital bond issuance by NRW.BANK.

Germany’s eWpG law, introduced in 2021, has created a clear legal path for the use of distributed ledger technology in securities, attracting banks and public institutions toward tokenized finance. While still small compared to the traditional bond market, digital bond activity is accelerating. Polygon’s involvement in the issuance coincides with its preparation 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. This upgrade aims to reduce finality time to just five seconds and enhance network resilience by minimizing the likelihood of chain reorganizations.

Sandeep Nailwal, CEO of the Polygon Foundation, described the upgrade as the most technically complex hard fork Polygon PoS has seen since its launch in 2020. 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 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. 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. 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.