• Registrar and blockchain changed during bond term for the first time in Germany
• Practical test demonstrates robustness of digital capital market infrastructure
• Common standards key to further scaling

KfW has provided another important impetus for the development of digital capital market infrastructure: a ‘stress test’ involving its third blockchain-based bond has demonstrated that key components can be replaced while the system remains operational. For the first time in Germany, both the registrar and the underlying blockchain were changed during the term of a crypto security issued under the German Electronic Securities Act (eWpG). At the same time, the test provides concrete evidence of what is still needed to enable broader adoption and scaling.

As part of the changeover on 23 September, DekaBank took over responsibility for maintaining the register from Cashlink. Concurrently, the register was transferred from the originally used Polygon blockchain to the infrastructure known as SWIAT, which will, in future, form part of Regulated Layer One (RL1), a new blockchain infrastructure for the European financial market. DZ BANK remains the collective registered holder of the bond. The stress test had no impact on investors. To KfW’s knowledge, this was the first time in Germany that the registrar, register and underlying blockchain of a crypto security had all been changed during its term.

Practical test highlights importance of common standards

The success of the stress test serves as more than just a technical proof of concept. It shows that digital capital market infrastructure continues to function even when key components are deliberately replaced during live operation. For the next stage of development, we now need common standards and interoperable systems. Only then can we create scalable structures and strengthen Europe’s competitiveness and digital sovereignty in the capital markets, stated KfW Treasurer Tim Armbruster.

One key finding concerns the interaction between different distributed ledger technology (DLT) systems, of which blockchain is the best-known form: Polygon and SWIAT/RL1 currently use different technical standards. As a result, the existing bond tokens, which represent the security in electronic form, could not be transferred directly from one type of infrastructure to the other. Instead, DekaBank, as the new registrar, generated new tokens on SWIAT, while Cashlink, the previous registrar, simultaneously deleted the tokens on Polygon.

The changeover went smoothly, even though the two blockchain infrastructures currently use different technical standards. That was precisely the value of this practical test for us: Under real-world conditions, we were able to demonstrate what already works today while also identifying very specifically where common standards and technical interoperability are needed to make future changeovers even easier, stated Marta Lambert Vinos, Head of Transaction Management at KfW.

The stress test and the change of DLT infrastructure serve as an impressive demonstration of how digital capital markets can continue to evolve under real-world conditions for the purpose of robust scaling. As a crypto securities registrar, we are delighted to be pursuing this innovative path together with our partners KfW, DekaBank and DZ BANK. We are also delighted to be using our infrastructure to contribute to a reliable and scalable ecosystem of a DLT-based capital market, said Raphael Neuberger, COO of Cashlink.

Theory is one thing – practical applicability is what really counts. By taking over the register management and transitioning to the SWIAT/RL1 network, we have demonstrated, together with KfW and the participating partners, that digital securities processes function reliably in practice even during an infrastructure change. This interoperability and standardisation will be key catalysts for the broad adoption of digital assets, states Thorben Lüthge, Head of Markets at DekaBank.

A further step concerns settlement in central bank money: For an interest payment in December 2026, KfW will use the European central banking system’s new Pontes pilot solution for the first time. The solution enables DLT-based transactions to be settled in central bank money. KfW has also been admitted to the Appia Contact Group. Building on the findings of the successful ECB exploration phase in 2024, the Group continues the dialogue between the ECB and market participants. Appia is the Eurosystem’s longer-term initiative to develop a future European infrastructure for the settlement of digital assets.

The stress test forms part of KfW’s third crypto bond, which was issued on 9 June 2026 as a crypto security under the German Electronic Securities Act (eWpG). The bond has a volume of EUR 100 million and matures on 7 December 2027. Through its DLT-based transactions to date, KfW has been working with banks, investors and infrastructure providers to test different components of digital capital market processes under real market conditions. As one of the largest bond issuers in the European capital market, the promotional bank consistently shares the insights gained with market participants to support the development of efficient, robust and scalable digital market structures.

Background information and key findings are summarised in our technical paper: “Stress test for third blockchain bond: lessons learned”