Banco Santander today announced that it has issued the first end-to-end blockchain bond. The bank issued the bond directly onto the blockchain and the bond will also continue to exist only on the blockchain: a first step towards a potential secondary market for mainstream security tokens in the future.
Banco Santander is itself the issuer of the $20 million bond, while one of the Group’s units purchased the bond at market price. 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 (CIB), the bank’s global division that supports corporate and institutional clients, acted as dealer for the issuance, continuing the work which started in Santander’s blockchain lab in 2016.
Santander used the public Ethereum blockchain, one of the more advanced open source blockchain technologies. This allows Santander to achieve the milestone of tokenizing the bond securely and registering it in a permissioned manner on the blockchain. The cash used to complete the investment (on-chain delivery-versus-payment) and the quarterly coupons have also been tokenised, i.e., represented digitally on the blockchain. Thanks to this automation, the one-year maturity bond has reduced the number of intermediaries required in the process, making the transaction faster, more efficient and simpler. The goal for Santander CIB is to engage with our most innovative clients as we move from the project stage to product development.
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 & Investment Banking, said: “Our clients are increasingly demanding the best thinking and technology in how we serve them in their capital-raising efforts. This blockchain-issued bond puts Santander at the forefront of capital markets innovation and demonstrates to clients that we are the best partner to support them on their digital journey.”
For this project, Santander received support from London based startup Nivaura, a regulated fintech company which builds innovative solutions that digitize and automate key processes in capital markets, as well as legal advice from global law firm Allen & Overy. Santander InnoVentures, the $200 million venture capital fund, invested last February in Nivaura.
Important Information
The information contained in this press release is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by Santander. Any person at any time acquiring securities must do so only on the basis of such person’s own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in this presentation. No investment activity should be undertaken on the basis of the information contained in this presentation. In making this press release available Santander gives no advice and makes no recommendation to buy, sell or otherwise deal in shares in Santander or in any other securities or investments whatsoever.
Neither this press release nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. No offering of securities shall be made in the United States except pursuant to registration under the U.S. Securities Act of 1933, as amended, or an exemption therefrom. Nothing contained in this press release is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act 2000.
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Banco Santander is itself the issuer of the $20 million bond, while one of the Group’s units purchased the bond at market price. 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 (CIB), the bank’s global division that supports corporate and institutional clients, acted as dealer for the issuance, continuing the work which started in Santander’s blockchain lab in 2016.
Santander used the public Ethereum blockchain, one of the more advanced open source blockchain technologies. This allows Santander to achieve the milestone of tokenizing the bond securely and registering it in a permissioned manner on the blockchain. The cash used to complete the investment (on-chain delivery-versus-payment) and the quarterly coupons have also been tokenised, i.e., represented digitally on the blockchain. Thanks to this automation, the one-year maturity bond has reduced the number of intermediaries required in the process, making the transaction faster, more efficient and simpler. The goal for Santander CIB is to engage with our most innovative clients as we move from the project stage to product development.
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 & Investment Banking, said: “Our clients are increasingly demanding the best thinking and technology in how we serve them in their capital-raising efforts. This blockchain-issued bond puts Santander at the forefront of capital markets innovation and demonstrates to clients that we are the best partner to support them on their digital journey.”
For this project, Santander received support from London based startup Nivaura, a regulated fintech company which builds innovative solutions that digitize and automate key processes in capital markets, as well as legal advice from global law firm Allen & Overy. Santander InnoVentures, the $200 million venture capital fund, invested last February in Nivaura.
Important Information
The information contained in this press release is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by Santander. Any person at any time acquiring securities must do so only on the basis of such person’s own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in this presentation. No investment activity should be undertaken on the basis of the information contained in this presentation. In making this press release available Santander gives no advice and makes no recommendation to buy, sell or otherwise deal in shares in Santander or in any other securities or investments whatsoever.
Neither this press release nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. No offering of securities shall be made in the United States except pursuant to registration under the U.S. Securities Act of 1933, as amended, or an exemption therefrom. Nothing contained in this press release is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act 2000.
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Chaineum :
Fondée en 2015, Chaineum est un cabinet de conseil en opérations de haut de bilan offrant une expertise de premier plan en matière d’ICO et STO, avec une vision stratégique orientée tant vers le métier de ses clients que sur la technologie blockchain. A ce titre, Chaineum a participé à la mise en œuvre de bonnes pratiques dans le secteur (ICO Charter, Security Token Network).
La division services blockchain de Chaineum, développe la technologie Chaineum Segment, une blockchain privée orientée objets.
About Chaineum:
Founded in 2015, Chaineum is a leading corporate finance advisory firm with a strong expertise in ICO and STO, and a strategic focus on both its clients' business and blockchain technology. As such, Chaineum paved the way in the implementation of certain best practices in this sector (ICO Charter, Security Token Network).
Chaineum's blockchain services division, is developing Chaineum Segment technology, an object-oriented private blockchain.
-------------------------
Recevez chaque matin par mail la newsletter Finyear, une sélection quotidienne des meilleures infos et expertises en finance digitale, corporate finance & crypto finance.
Read for free The daily newspaper Finyear & its daily newsletter.
Receive the Finyear's newsletter every morning by email, a daily snapshot of the best news and expertise in digital finance, corporate finance & crypto finance.
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Chaineum :
Fondée en 2015, Chaineum est un cabinet de conseil en opérations de haut de bilan offrant une expertise de premier plan en matière d’ICO et STO, avec une vision stratégique orientée tant vers le métier de ses clients que sur la technologie blockchain. A ce titre, Chaineum a participé à la mise en œuvre de bonnes pratiques dans le secteur (ICO Charter, Security Token Network).
La division services blockchain de Chaineum, développe la technologie Chaineum Segment, une blockchain privée orientée objets.
About Chaineum:
Founded in 2015, Chaineum is a leading corporate finance advisory firm with a strong expertise in ICO and STO, and a strategic focus on both its clients' business and blockchain technology. As such, Chaineum paved the way in the implementation of certain best practices in this sector (ICO Charter, Security Token Network).
Chaineum's blockchain services division, is developing Chaineum Segment technology, an object-oriented private blockchain.
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This information has no regard to the specific investment objectives, financial situation and particular needs of any specific recipient of this information and investments discussed may not be suitable for all investors.
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