Determinants of Bond Spreads in Regulated Tokenized Bonds: Evidence From Germany

Abstract

Blockchain technology can enhance efficiency in bond markets through tokenization. Despite growing issuance volumes globally, empirical evidence on tokenized bond pricing remains limited. This study examines whether tokenization-related features derived from the theoretical advantages of blockchain infrastructure are reflected in bond spreads in Germany. The paper outlines the regulatory framework, lifecycle of tokenized bonds in Germany and tests five hypotheses on a sample of 198 tokenized bonds using one-sided t-tests and OLS regression. Tokenized bonds exhibit a mean coupon rate of 7.28% and a significant mean spread premium of 1.17% relative to aggregated corporate loan benchmarks. Issuers are predominantly smaller and mostly non-financial issuers, indicating a niche segment rather than serving as a substitute for traditional investment-grade debt. Maturity, leverage, issuance volume, and standardization measured through blockchain activity significantly influence spreads, whereas ESG characteristics, accessibility, and scalability remain insignificant. This study provides one of the first empirical analysis of regulated bond tokenization and examines whether tokenization-related bond features are reflected in bond pricing. The findings highlight important requirements for moving global tokenized bond markets beyond proof-of-concept stages, including improved secondary market liquidity, cash-on-chain settlement solutions and cooperation among market participants.