Santander builds confidence in Blockchain as Bank Redeems Ethereum-Issued Bond
A well-known banking multinational company Santander has transferred a bond worth $20 million, issued on the public ethereum blockchain at the beginning of fall. Later, John Whelan, Head of Digital Investment Banking at Santander and chairman of the Enterprise Ethereum Alliance, praised the platform as a real-world equity problem solution. Whelan mentioned in a Tweet posted this Tuesday:
“We just performed an early redemption of our blockchain-based bond that we issued on September 10th, 2019. This unequivocally proves that a debt security can be managed through its full lifecycle on a blockchain (public in this case).”
We just performed an early redemption of our blockchain-based bond that we issued on September 10th, 2019. This unequivocally proves that a debt security can be managed through its full lifecycle on a blockchain (public in this case).
Here're the blockchain transactions:
— John W. 🇮🇪🇺🇸🇪🇸🇪🇺 (@_JohnWhelan) December 10, 2019
As clear evidence of the payment, he also provided public blockchain transfers on Etherscan. Remarkably, Santander was both a shareholder and a lender in this pilot deal.
The bank used a custom ethereum token to represents the $20 million bond and settled it with another token that represents cash held in a custody account.
While other entities such as the World Bank and have also issued blockchain-based bonds, Santander appears to be the only company to use a public blockchain to manage all aspects of bond issuance. Moreover, Santander Security Services even custodied the cryptographic keys for the tokenized security and cash!
Some experts have predicted that every stock, bond, commodity, and currency will eventually be tokenized, that may seem like a stretch but if you think of tokenization as the digitization of real-world assets then it makes perfect sense. Ethereum and Tezos are leading the wave in serving as platforms for tokenization of assets.
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