Why Traditional Financing Is No Longer Sufficient for Many Companies
SMEs are considered the backbone of the economy and are simultaneously often confronted with structural challenges in raising capital.
Many healthy companies either do not receive sufficient capital or only at unfavorable terms. Rising interest rates, stricter requirements, and complex processes further complicate access to traditional forms of financing.
The result is clearly noticeable. Growth projects are postponed, innovation initiatives are delayed, and investments in future topics such as digitalization or sustainability fall short of plans.
Against this backdrop, alternative financing models are gaining increasing importance. Tokenized corporate bonds are among the most promising approaches.
Tokenized Bonds Simply Explained
A tokenized corporate bond is the digital evolution of a traditional bond.
Companies raise capital from investors and issue digital tokens in return that represent the economic rights of the bond, particularly interest and repayment.
The key difference lies in the technical implementation. The bond conditions are stored in so-called smart contracts that are executed on a blockchain.
This creates new possibilities:
- Interest payments can be automated and made on schedule
- Transactions are transparent and traceable at all times
- Shares can be transferred or made tradeable more easily
Overall, this leads to more efficient processes, reduced complexity, and lower costs.
Why the Market Is Changing Right Now
Tokenized financing was long considered experimental. However, a clear shift is now becoming apparent.
Technological infrastructure, regulatory frameworks, and practical experience have advanced significantly in recent years. As a result, tokenized bonds are becoming increasingly relevant for smaller issuance volumes as well.
While such models were previously reserved primarily for large corporations, they are now becoming practical for financings in the range of one to several tens of millions of euros. This range is particularly relevant for many mid-sized companies.
A Practical Example Shows the Potential
A frequently cited example is the tokenized bond issued by Siemens in 2024 with a volume of 300 million euros.
Compared to traditional issuances, a significantly more efficient process was evident. Processes could be accelerated, intermediaries reduced, and transactions settled in near real-time. At the same time, investors received a high level of transparency over all relevant conditions.
This example illustrates the potential of the technology and serves as a reference for further development toward smaller and more flexible issuance models.
The Key Benefits at a Glance
Tokenized corporate bonds fundamentally change the structure of capital raising.
The key benefits include:
Faster Implementation
Financings can be realized within shorter timeframes
More Efficient Cost Structure
Through automation and reduced use of intermediaries, issuance costs decrease
Expanded Investor Access
In addition to institutional investors, other investor groups can also be reached
Automated Processes
Interest and repayments are made reliably without manual intervention
High Transparency
All transactions and conditions are traceably documented
How Companies Are Already Using Tokenized Bonds
The applications are diverse and practical.
Mechanical Engineering – Baden-Württemberg
A mechanical engineering company in Baden-Württemberg is financing a new production hall through a tokenized bond with a volume of 8 million euros. Investors participate across regions while interest payments are automated.
Energy – Austria
An energy company in Austria is using tokenized green bonds to finance a solar project. Revenue from operations partially flows directly back to investors.
Technology – Switzerland
A technology company in Switzerland combines a tokenized bond with a later conversion option into equity, creating additional flexibility.
What to Consider During Implementation
Tokenized bonds are regulated financial instruments and are subject to clearly defined legal requirements.
These include, among others:
- Prospectus requirements and transparent investor information
- Requirements in the area of anti-money laundering and identity verification
- Structuring and legal design of the issuance
With appropriate planning and structure, however, these requirements can be implemented efficiently.
In addition, the following factors play an important role:
- Clear communication with investors
- Reliable technical infrastructure
- Clean processes for issuance, management, and reporting
What This Means for SMEs
Tokenized corporate bonds open up new opportunities for raising capital.
They enable faster, more efficient, and more flexible financing and offer an alternative to traditional routes such as bank loans or conventional bonds.
For many companies, this model is increasingly developing from a theoretical option into a realistic solution for the coming years.