Banco Santander issues first end-to-end blockchain bond to launch new secondary token market

Spanish bank Santander has announced it has issued a bond that will only exist on the Ethereum blockchain.

Banco Santander’s $20m blockchain bond is seen by the financial institutions as an initial step towards creating a potential future secondary market for mainstream security tokens.

The bond carries a quarterly coupon of 1.98%. Santander Securities Services is acting as tokenization agent and custodian of the cryptographic keys.

Santander Corporate and Investment Banking, the bank’s global division that supports corporate and institutional clients, acted as dealer for the issuance.

By using the Ethereum blockchain, Santander claims the bank was able to tokenize the bond securely and registering it in a permissioned manner on the blockchain.

José García Cantera, chief financial officer at Banco Santander, said, “Santander is at the forefront of the profound digital transformation of the financial sector and this transaction is one example. We want to take advantage of any technology that can accelerate that process, so that our customers thrive and be faster and more efficient, and blockchain is one of those technologies.”

José María Linares, global head of Santander Corporate and Investment Banking, said the new blockchain bond was in response to rising client demand for new innovations.

London-based startup Nivaura, a regulated FinTech company which builds innovative solutions that digitize and automate key processes in capital markets, supported Santander in creating the blockchain bond.

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