Blockchain lending startup Bitbond launches Germany’s first regulated STO

Bitbond, a blockchain-based lending platform, has commenced a security token offering (STO), which it claims is the first to be approved by the German financial regulatory authority, CoinDesk reported.

The Berlin-based startup is targeting a €3.5 million ($3.9 million) raise in the STO. Of this amount, €2 million has already been raised, according to the STO website.

The token sale will run until July 08 and is open to global investors, except those in the U.S. and Canada. The Bitbond token BB1i can be purchased with euro (EUR), bitcoin (BTC), ether (ETH), and stellar lumens (XLM). The company plans use the proceeds from the token sale to continue offering loans to small businesses.

Bitbond describes as the BB1 token as “Germany's first security token.” Issued on the Stellar blockchain, the token works as a bond. Bitbond STO website states:

“You will receive a fixed annual coupon of 4% paid out on a quarterly basis (1% every three months) as well as variable coupon based on a share of the profits generated by Bitbond Finance (60% of pre-tax profits) throughout the entire maturity of the token (10 years).”

Bitbond said that the prospectus of the STO has been approved by German regulator Bafin. It said:

“The BB1 token is more secure and stable compared to other crypto-based investments because a legally compliant prospectus regulates your rights.”

Founded in 2013, Bitbond is a lending platform for small business loans. It leverages blockchain technology to connect creditworthy borrowers with individual and institutional investors. The company claims to have processed more than $15 million-worth of business loans to date and has raised over $10 million in various funding rounds to support its loan offerings.

“Small businesses are an incredibly important part of the economy, and hire the majority of all employed people worldwide. We see this STO as a way to help small businesses create more jobs, and supercharge their own growth,” Radoslav Albrecht, Bitbond founder and CEO, said.