Berlin Hyp is a pioneer when it comes to innovation on the capital market. After having issued the first Green Pfandbrief worldwide, as well as a Sustainability-Linked Bond and Social Bonds, the Bank expands its innovative and modern refinancing mix once again in 2024 by introducing Germany’s first Blockchain Pfandbrief.

With this new product, Berlin Hyp is bringing its Pfandbrief expertise to the digital world. Issuing a traditional Pfandbrief involves a complex procedure with many steps and participants. The German Electronic Securities Act (eWpG) gives issuers the legal foundation for making this procedure much more efficient with the help of automated digital processes and transactions.

A key role is played here by smart contracts on blockchain.

A blockchain is a distributed data ledger that records transactions in a growing list of records (blocks). Each block contains information about the previous blocks, effectively forming a chain, hence the name blockchain.

A smart contract functions like an automated program on a blockchain: every time a certain if-then condition has been met, the program autonomously executes a previously agreed-on step – for example the registration of a digital bond on the blockchain, the transfer of ownership to investors, or the execution of interest and principal payment transactions on the dates defined in a bond’s terms and conditions.

A Pfandbrief issued and managed in this manner is cost-efficient and can be processed quickly. It also offers a high degree of safety due to the irreversible structure of the blockchain.

The latter aspect – safety – is one of the most important properties for a Pfandbrief, which makes Berlin Hyp’s Blockchain Pfandbrief a perfect addition to the Bank’s refinancing mix.

Click here to read our press release on the Blockchain Pfandbrief.