The Berlin crypto start-up Bitbond has managed to have the planned STO approved by the German Federal Financial Supervisory Authority (BaFin). This makes them the first crypto company to not only own their own BaFin license, but also to carry out the first fully regulated crypto IPO in Germany. We have found out in a personal interview with Bitbond CEO Radoslav Albrecht why the security token corresponds to a bond, where it can be traded and what the targeted EUR 100 million should be used for.

QUESTION: Why did you issue a bond and not a share?

Radoslav Albrecht: That has something to do with our business model. We are a platform where small business owners and self-employed people can apply for working capital financing. As a platform, we grow, the more investment potential exists, that is, the more investors want to invest on our platform. So far, we are already doing well in terms of equity. However, we are always looking for new ways to expand our refinancing potential; and to that extent, a debt product is at first the most obvious. Because after we dealt with security tokens, we realized relatively quickly that a debt product fits best. Here there is a very good match of costs and coupon or profit share for the investors of the token.

For the upcoming Security Token Offering (STO), Bitbond has now joined forces with solarisBank. In addition to a BaFin approval and the banking license of solarisBank, everything is now ready for the first German STO.

The era of Initial Coin Offerings (ICOs) seems to be drawing to a close. The big wave from 2017 has largely disappeared, only a few stable projects have been able to survive the hype so far. Based on the dot-com bubble of the late 1990s, one could say: Now begins the search for the needle in a haystack. But if you think that nothing works, the next investment vehicle is already in the starting blocks: Security Token Offerings – short: STO.

Because these promise more security. In contrast to the ICOs’ coins, they do not have to show any forward-looking (and often non-existent) use case, but stand for tokenized bonds. Bitbond is now the first company that has been authorized by BaFin to launch an STO.