Santander Bank Becomes First institution To Issue A $20M End-to-End Blockchain Bond On Ethereum


Banco Santander, a major Spanish bank sent out a public press report stating that it had issued and settled a one-of-a-kind blockchain bond. In the press release sent on September 12th, 2019 Santander laid bare news that it had recently issued a twenty-million-dollar bond directly onto the ETH (Ethereum) blockchain. The bond is expected to remain in the Ethereum blockchain until December when it will mature.

Simpler, Cheaper, and Faster than Legacy Systems

In the release, it went on to claim that by using blockchain to issue the end-to-end bond, it had taken its first step towards seeking a tributary bazaar for the conventional tokens. The release went on to state that the bank had issued the twenty million bond that carried a 1,98 quarterly coupon. The bond was purchased by one of the Bank’s units at the prevailing market rates.

The presser went on to state that Santander Securities Services had acted as the custodian and tokenization agents of the crypto keys that were used for the bond’s issuance. The dealer for this transaction was Santander Corporate and Investment Banking Unit. This transaction was executed on the ETH blockchain.

Santander made sure to secure this tokenized bond in the permitted method. The quarterly tokens and the cash that was used to complete this particular bond had all been tokenized. The bank added that the high automation degree involved in the process had helped to reduce the total number of intermediaries that were required to execute the whole transaction.

It also noted that based on its experience, the blockchain bond transaction was simpler, more efficient, and faster as compared to the use of legacy systems. Santander added that moving forward, it would seek ways for it to engage its clients to assist it to move this initiative from its formative stages to the development stages.

This bond was a continuance of the work that was started in 2016 by Santander’s blockchain laboratory. It would not, however, have been successful without the additional support that was provided by Nivaura, a fin-tech company based in London. Legal advice for this bond was provided by Allen & Overy.

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