Thursday 12 September 2019 11:20 am

Santander issues first end-to-end $20m blockchain bond

Santander said today it has become the first financial institution to digitise the process of issuing bonds on a public blockchain.

The Spanish banking giant used the public ethereum blockchain to tokenise the bond securely and register it on the blockchain – a sort of digital public ledger that can record transactions in close to real time.

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The cash used to complete the investment and the bond’s coupons have also been tokenised.

The one-year maturity bond carries a quarterly coupon of 1.98 per cent, the bank said.

Santander issued the $20m (£16.2m) bond to itself, meaning that no outside investors were involved in the process.

A £56m blockchain bond issued by the World Bank last year used a private version of ethereum.

Meanwhile Societe Generale issued a public ethereum bond earlier this year, but does not appear to have used tokenised cash.

Santander’s chief financial officer, Jose Garcia Cantera, 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,” he added.

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Santander’s global head corporate and investment banking, Jose Maria Linares, said the bond puts the bank” at the forefront of capital markets innovation and demonstrates to clients that we are the best partner to support them on their digital journey.”

Main image credit: Getty