Santander proves blockchain-based bonds can be supported on public networks

Spanish banking giant Santander redeems a $2oM bond through Ethereum blockchain. 

Santander redeems a $20M bond on Ethereum network

The firm has processed an early repayment of its blockchain-based bonds that it issued earlier this year. The bonds proved that the Ethereum blockchain can be used to power the issuance of securities as well as support it across an entire cycle.

John Whelan from Santander announced the news on Twitter on Tuesday. He revealed that the company conducted an “early redemption” of their blockchain bond that they had issued a month earlier. He then noted that the successful test indicated that security debt can be managed through a public blockchain across a “full lifecycle.”

John Whelan is also the chair of the board at the Enterprise Ethereum Alliance (EEA) a major consortium for the Ethereum network. Whelan proved the transaction by providing the transaction to EtherScan, a block explorer that verified the transaction. Whelan provided details on both the issuer wallet as well as the investor wallet.

Blockchain-based bonds

Santander announced the world’s first end-to-end blockchain bond in September 2019. The bank’s aim was to use blockchain technology to reduce the efforts in bond issuance as well as increase the speed of bond issuance. The bank claimed that the bond will remain on the Ethereum network for one year completing its lifecycle on the blockchain.

Santander was soon followed by a commercial bank in Asia. The Bank of China issued blockchain-based bonds worth nearly 3 billion dollars. The bank’s action line with the nation’s aim of increasing blockchain adoption in the country before the launch of the Central Bank digital currency.

Featured image by Wikipedia Commons.