Bitbond, a Stellar-based blockchain startup that provides business loans, announced this week that it has gained German regulatory approval to conduct a security token offering (STO).
According to the announcement, Germany’s Federal Financial Supervisory Authority, better known as BaFin, has approved Bitbond’s plea under the German Banking Act to become a licensed asset broker, making Bitbond the first blockchain-based financial services company to be regulated under the body.
“We are the first regulated blockchain company to set new standards. It is important for us to show the investors who trust our platform that we are acting according to transparent rules,” said Bitbond founder and CEO Radoslav Albrecht, adding that the recent approval will help advance STOs in Germany.
The company is planning to issue and sell Bitbond Tokens (BB1), which have a nominal value of €1 and enable investors to invest in the success of the company and the loans it brokers. The tokens will be tradeable and purchased on regulated crypto exchanges.
According to the offering’s prospectus, “token holders will receive 1% interest on their invested amount every quarter (4% per year). Additionally, token holders receive a variable coupon paid out once per year. Both the quarterly and the annual coupons continue for 10 years, at which point the token reaches its maturity and is bought back at its face value of €1 per token.”
The proceeds of the STO will be used to build Bitbond’s core lending business, which is currently targeting small businesses and freelancers. From there, Bitbond hopes to implement innovations in the payments and credit scoring area.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.