What changes is the carrier of the right, not the right itself. A classic bond comes into existence through a global certificate held by a central securities depository. A digital bond comes into existence through registration in an electronic securities register (§ 2 (1) eWpG). The claim, bondholder rights and the prospectus question stay the same. What changes: who takes part, how terms are deposited, how payments run, and where the bond can trade.
The token is the smaller change
Most digital bond projects start with the technology. For you as issuer, that is the smaller change. The bigger one is organizational. Who keeps the bond's register? Who pays out? Who has to agree if the bond is to move to an exchange later? With a global certificate, an established process with depository and paying agent answers them. With a digital bond, you answer them yourself, in the terms, before the first registration.
What stays the same
The bond remains a bearer bond: the investor's claim against you for interest and repayment (§ 793 BGB). An electronic security has the same legal effect as one issued by certificate, unless the law provides otherwise (§ 2 (2) eWpG).
The German Bond Act (SchVG) applies unchanged, for example to majority resolutions of bondholders. Whether you need a prospectus or a securities information sheet depends on the offer, not on the form. Details on investor groups are in Who can invest in a digital bond?
What changes, side by side
An electronic security is either a central register security or a crypto security (§ 4 (1) to (3) eWpG). Compared with the global certificate:
How the bond comes into existence
- Global certificate: issue of the certificate, deposit with the central securities depository.
- Central register security: registration in a central register (§ 2 (1), § 12 eWpG).
- Crypto security: registration in a crypto securities register (§ 2 (1), § 16 eWpG).
Who keeps the record
- Global certificate: the central securities depository as collective custodian (§ 9a DepotG).
- Central register security: a central securities depository or an authorized custodian (§ 12 (2) eWpG).
- Crypto security: the register keeper you name (§ 16 (2) eWpG), licensed under § 1 (1a) sentence 2 no. 8 KWG.
Terms
- Global certificate: attached to the certificate.
- Both electronic forms: deposited with the register keeper before registration (§ 5 (1) eWpG).
How investors hold
- Global certificate: bank securities account, co-ownership of the collective holding (§ 6 DepotG).
- Central register security: bank securities account with collective registration (§ 9 (1) eWpG).
- Crypto security: collective registration through a custodian, or individual registration in the investor's name (§ 8 (1) eWpG).
Payment
- Global certificate: through paying agent and custodian banks.
- Both electronic forms: payment upon an instruction to transfer the security to you (§ 29 (1) eWpG).
Trading venue
- Global certificate: possible, booked in book-entry settlement (Effektengiro).
- Central register security: possible; with a central securities depository, booked in Effektengiro (§ 12 (3) eWpG).
- Crypto security: once recorded with a central securities depository (Art. 3 (2) Regulation (EU) No 909/2014), or on a DLT market infrastructure under the Pilot Regime Regulation (EU) 2022/858.
Who joins the table
For a crypto security, a register keeper joins, named by you to the holders (§ 16 (2) eWpG). Keeping a crypto securities register is a financial service that needs a license (§ 1 (1a) sentence 2 no. 8 KWG). If investors hold through a custodian, that custodian needs its own license. Which role you need for what: Who does what in a digital bond issuance.
Your terms go on file
The terms no longer hang on a certificate. You deposit them with the register keeper before registration (§ 5 (1) eWpG), and anyone can read them.
There is a clock. If the bond is not registered within three months of the deposit, the register keeper deletes the terms (§ 5 (1) eWpG). So deposit only once the subscription period and registration date are fixed. The full sequence is in Digital bond under the eWpG: steps and statutory deadlines.
Interest and repayment work differently
With a certificate, you pay against surrender of the certificate (§ 797 BGB). In a collective holding, paying agent and custodian banks handle this.
With an electronic security, you only have to pay once the holder instructs the register keeper to transfer the security to you, upon proof of payment (§ 29 (1) eWpG). Who pays and who transfers must be fixed by contract before the first interest payment. The processes over the term are in The lifecycle of a tokenized bond.
Switching form later is hard
Only within narrow limits:
- A certificate can be replaced by a central register security at a central securities depository without investor consent, if the depository is also registered as holder and the terms neither exclude this nor make it subject to consent (§ 6 (3) eWpG). Otherwise every holder must expressly agree (§ 6 (4) eWpG).
- Moving a crypto security to another register needs the consent of all holders or of the supervisory authority (§ 22 eWpG).
- An electronic security can be replaced by a certificate without consent, if the terms expressly allow it (§ 6 (2) eWpG).
Which form fits you
- Should the bond trade on a trading venue or sit in a normal bank securities account? Yes: global certificate or central register security at a central securities depository. No: go to question 2.
- Do you want to manage holders and payments directly through the register? Yes: crypto security, with individual or collective registration. No: the global certificate remains the shorter route.
- Could trading on a trading venue come later? Plan the register route before issuance; a register keeper change alone does not change the register (§ 22 eWpG).
- Is a licensed register keeper in place? No: settle this before you deposit the terms. If you name no one, you count as the register keeper yourself (§ 16 (2) sentence 2 eWpG).
The mistake that costs most: a crypto security with no exit
An issuer places a crypto security in individual registration with a few investors. Two years later, it wants to increase the bond and list it on a trading venue. The terms contain neither a replacement right under § 6 (2) eWpG nor a rule for changing registers.
Moving to another register now needs the consent of all holders or of the supervisory authority (§ 22 eWpG). The result is a bondholder vote or a new issue with an exchange offer. Both mean new documents, deadlines and register keeper costs.
A replacement clause alone does not establish a settled route around the consent requirement for a register change.
Your next step
Before you deposit your terms, check: where the bond should trade, who keeps your register, and who pays and transfers at each interest date. If one answer is open, talk to us.