Blockchain Bonds Pipped to Become New Standard

Blockchain Bonds Pipped to Become New Standard

New research has discovered that blockchain may be the future for the issuance of financial bonds.

 The analysis, which was undertaken by the research arm of the exchange platform Binance, discovered this via a deep dive into the practice of leading Spanish bank branch, Santander. The bank itself is one of the most recognisable bank brands across the globe with branches across Europe, as well as more recently, in North and South America, and continental Asia with clientele in the millions.

Last week, on the 12th September, the firm took a dive into the world of blockchain and in an industry first and began issuing tokenized bonds. This tokenize bonds were launch on the Ethereum blockchain and were valued at $20 Million USD.

While this was the first leading bank to do this, this follows trend of late which has seen this become more prevalent from other global institutions, such as the Societe Generale and the Austrian government. As this is a new practice, the future of practice was ambiguous at best but with this new research, some new light has been shed on these tokenized bond and spoiler alert, it is looking good.

The New Fixed-Income Industry Standard

As per the new report, “Eventually, blockchain bonds should gradually become a new standard in the fixed-income industry.” This is based on the fact that these tokenize bonds provide three separate features that provide them with advantages over more traditional methods of issuing bonds.

For one, due to the fact that they offer atomic hash time-locked contracts, there is a drastic reduction in counterparty risk. As well as this, it offers reduced issuance costs and faster execution due to operational improvements, and easier taxation and improved oversight about current debt holders, among other added-value services. Accumulating in the finding that bonds of these descriptions may soon become the norm for bond issuance.

However, there are a couple of variables in terms of the Santander framework that may sour the milk though. For one, they use an “off-chain legal documents with a trusted custodian” as opposed to issuing “native” securities on Ethereum. Plus, “they did not publicly release the contract source code, outweighing some of the presumed benefits from the use of blockchain technology.

Of course, all this, for now, is preliminary and it could be a long time for this to become the norm, as many more companies, particularly big-name organisations, will need to adopt the system first though. This said, it bodes well the potential for blockchain is yet another financial field secular of the crypto industry.

Ready to join our tribe?

We respect your email privacy

Subscribe now to recieve exclusive updates and offers!

Recently Similar News

Latest Guides

Latest News


Binance Suspends SEPA Inward Payments Until Further Notice

Binance Suspends SEPA Inward Payments Until Further Notice Binance has just announced that it has temporarily stopped all incoming SEPA payments. As a result, users will no longer be able to deposit euros using the primary European payments network. The world’s largest cryptocurrency exchange did not provide any specific information regarding the reason behind this […]

12 July, 2021

Why are Crypto Holders Worried of Declaring Their Ownership?

Cryptocurrencies have been popularly regarded as the future of finance globally. Investing in virtual coins has become a lot easier than it was a few years ago with the evolving crypto industry. Over the last few years, Bitcoin has caused a lot of buzz in the market. It has established itself as the de facto […]

8 July, 2021

Bitcoin On The Rebound Following Elon Musk’s Latest Announcement

The price of the world’s largest cryptocurrency is rising again following the latest comments from Elon Musk. Bitcoin’s price has climbed and stayed above $40,000 on Monday 14th June, following an announcement by Musk that Tesla will, once again, start accepting BTC payments. The latest comments have proven once more what a powerful influence the […]

16 June, 2021

Bitcoin Is Now Legal Tender In El Salvador

The world largest cryptocurrency has become a legal currency in El Salvador. Following a congressional vote held on Tuesday, a significant majority agreed to adopt Bitcoin and use it alongside the country’s other currency, the US dollar. In the words of El Salvador’s President, this decision has made “history”. Within the next 90 days, all […]

10 June, 2021

Google Updates Its Advertising Policy To Allow Crypto Ads

Global search engine giant, Google, has announced that it will be accepting cryptocurrency advertisements targeting customers in the US. This change to the tech giant’s financial products and services ads policy is expected to be made at the start of August 2021. As a result, operators of cryptocurrency exchanges and wallets will be able to […]

8 June, 2021

Coinbase Stock Loses Over 25% Since April IPO

It was hailed as one of the greatest moments in cryptocurrency history. The Coinbase IPO was seen as the tipping point of the sector, a moment when cryptocurrencies will finally find their well-deserved place within the financial industry. Interest was high, and when Coinbase (COIN) began trading on the Nasdaq on April 14, 2021, the […]

26 May, 2021
Bitcoin,Cryptocurrency,Social Media

Bitcoin Drops by Over 30% to $30,000 After Another of Elon Musk’s Tweets

Tesla’s CEO and among the top three richest people in the world, Elon Musk, has yet again sent Bitcoin and other altcoins on a wild ride that saw the markets bleed after massive sell-offs. In a flurry of tweets that begun on Sunday, Elon seems to have implied that Tesla would liquidate its Bitcoin holdings. […]

20 May, 2021

Tune In To The 4th Edition of the AIBC Pitch

On the 25th of May 2021, Dubai will once again play host to the much-anticipated Draper-Aladdin AIBC Startup Pitch. 100 companies operating in the exciting fields of AI, Blockchain, Quantum Tech, FinTech, Big Data and IoT will be showcasing their ideas to investors and other stakeholders. Up to $500,000 can be won by any single […]

16 May, 2021