Ethereum Used by Banco Santander to Issue $20M Bond

“Banco Santander issues, escrows, and settles a $20 million bond on the Ethereum mainnet. DeFi is here.” Read More — Evan Van Ness, Ethereum

Summary

The fifth-largest bank in Europe, Spanish bank Banco Santander, has issued, escrowed and settled a $20 million bond on the Ethereum mainnet in what it claims is the first end-to-end blockchain bond ever.

Santander securely tokenized the bond in a permissioned manner. Both the cash used to complete the investment and the quarterly tokens were tokenized, with the bank noting that the high degree of automation involved dramatically reduced the number of intermediaries required.

The blockchain bond transaction was faster, more efficient and simpler than legacy systems. Santander will now engage with clients to move the initiative from the project stage through to development.

Significance

Last month, the World Bank revealed it had raised fund for its Kangaroo bond due August 2020 using blockchain technology. And now one of the largest banks in Europe chose Ethereum to issue, escrow and settle a bond. The move is an indicator of ETH’s growing importance in finance and is likely to be followed by more banks utilizing blockchain technology to tokenize various assets. In addition to all of the DeFi development taking place on the Ethereum mainnet, this news is bullish for Ethereum. It also demonstrates yet another ideal use case for blockchain technology.

The downside of the increased usage is that the Ethereum network is once again getting congested. The ETH2.0 upgrade should address this issue but is still months away.

Price at the time of Blockfolio Signal: $178. View ETH on Blockfolio.