In what is believed to be an industry first, Santander recently announced the completion of a $20 Million bond settlement.
This process, which took place on the public Ethereum blockchain, was unique, as the entirety of it was completed digitally – including, both, the issuance and settlement.
Santander completed this feat as a sort of pilot, proving the viability and efficiency of the process to, not only themselves, but outside parties. With this in mind, the issuance and settlement was completed without any secondary parties – meaning that Santander not only issued the tokenized securities to themselves, but handled the settlement in-house as well.
Santander was able to develop the means to complete this process through the help of Nivaura. With Santander being an investor in the tech provider, it should come as no surprise that they were chosen to assist.
- World Bank
Through use of a tailor built private blockchain – borrowing much of the Ethereum structuring – World Bank raised $33.3 million from investors. This was made possible by issuing tokenized bonds, known as Bond-i.
- Societe Generale
In April of 2019, this European banking giant, which was founded in 1864, tested the blockchain waters. This took form as a pilot, which saw the bank issue $100 million EUR worth of covered bonds to themselves. The process was completed through the use of security tokens, issued over the Ethereum network.
Upon announcing the successful issuance and settlement of the bond, representatives from each, Santander and Nivaura, took the time to comment.
José Garcia Cantera, CFO of Santander, stated,
“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, stated,
“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.”
Avtar Sehra, CEO of Nivaura, stated,
“That’s the key significance of what Santander is doing here…They are saying ‘let’s digitize the entire process’. We are not now doing the bond construction in the old fashioned way, inputting data manually in an insecure fashion into a blockchain to tokenize it and doing the same with cash. That’s absurd…The Santander execution is the first truly digital front to back execution process, which securely uses relevant data to tokenize both the assets and cash to enable on-chain settlement and coupon payments.”
Banco Santander is a leading Spanish bank that services over 140 million customers. Since a rebranding in 2018, the company has placed an increased focus on next-gen technologies, such as DLT and blockchain.
Operating out of London, England, this tech provider was founded in 2015. Above all, the team behind the project works to develop solutions which drive digital investment banking.
CEO, Avtar Sehra, currently oversees company operations.
Fundament And Bauwens to Tokenize Emporio Tower
The tokenization firm Fundament upped the ante this week after the company announced that it successfully partnered with one of the most prestigious real estate developers in the country – Bauwens. The maneuver places Fundament at the forefront of the German tokenization sector. Also, it signals a shift from major real estate firms in the area over to a blockchain-based strategy.
Strategic Investor – Fundament
The real estate giant Bauwens is one of the largest development firms in operation across Germany. The firm currently manages billions in investment properties, most notably, the iconic Emporio Tower.
The Emporio Tower is one of the most recognizable buildings in Hamburg. The 98-meter high structure entered service back in 1964. Originally, the building served as the global headquarters for Deutsche Unilever before the firm relocated in 2009. Today the building is a tourist attraction and serves as a luxury hotel.
According to Fundament executives, negotiations started in May. At that time, Bauwens showed interest in the growing tokenization sector. Interestingly, the firm secured a 15 percent stake in Fundament back in September 2019.
An Industry First
Fundament was a prime investment for Bauwens after it became the first firm to gain approval from German regulators – BaFIN. The approval allows Fundament to issue tokenized real estate bonds in a compliant manner.
Managing director, Alexander Jacobi praised the strategic partnership. He took a moment to discuss the important milestone Fundament achieved. He ended his statement after calling Fundaments tokenized bond a “decisive breakthrough” in the market.
Fundament entered the market in 2017. The Berlin-based FinTech firm pioneered tokenization in the region. The company achieved numerous industry firsts since its BaFIN approval. Importantly, the company utilizes the Ethereum blockchain to issue security tokens.
Now, Fundament seeks to expand its platform’s capabilities. The firm announced plans to host a $280 million Initial Bond Offering (IBO). According to company documents, the real estate bond token sale will start on October 8.
The tokenized bonds represent shares in five large construction projects currently underway in the country. The project’s locations make them ideal investments. There are three properties located in Hamburg, one in Frankfurt, and one in the college city of Jen. Notably, Company officials stated that they may consider adding additional properties from Bauwens.
Speaking on the new developments, CEO, Thomas Ermel discussed the nuances of the new partnership. He explained that not all of Bauwens properties are a good fit for tokenization. His firm chose the properties that best suited the strategy.
Ermel also discussed Bauwen’s market positioning. He explained that the company has the type of reputation that can entice more investors to the project.
Bauwens Goes Hi-Tech
Bauwens already works with numerous tech firms in the industry with company officials explaining the platform’s interest in tokenizing portions of its portfolio via bonds. Now, Fundament and Bauwens are ready to take the German real estate sector to the next level with their latest venture.
Deutsche Bank Bond Tokenized on EOS Blockchain -dBond
This week, the open-source tokenization platform dBond celebrated the successful tokenization of a Deutsche Bank bond on the EOS blockchain. EOS has long been touted as a superior tokenization protocol and the accomplishment is a milestone for the entire EOS camp.
News of the strategy emerged via a dBond medium post. Notably, the post explained the concept was a first in the marketplace. Interestingly, Deutsche Bank had nothing to do with the tokenization. the dBond develop team figured out how to tokenize the bond without the need for the bank’s approval.
The EOS blockchain is the backbone bone of the entire project. In fact, the concept is possible only because the DUSD stable coin and the newly tokenized bonds both utilize EOS’s 4th generation blockchain which features robust smart contract capabilities.
EOS made headlines just this week after developers released the Version 2.0 of the EOSIO protocol. The new protocol improves on the blockchain’s already impressive smart contract programming capabilities. It’s precisely these capabilities that made EOS a wise choice for the bank to consider.
Additionally, EOS recently settled with the SEC to the tune of a $24 million dollar fine for their 2017 ICO in which the company raised $4.1 billion in funding. The SEC alleged that EOS illegally offered securities during the ICO. Now, EOS is fully in line with regulators. In this manner, the platform is now ready to step into the tokenized securities and bond markets.
How it Works
According to the post, an investor purchases a USD-denominated bond. At this point, the new bond deposits into an escrow account. Then, thebondsacc contract requests the creation of an equally valued DUSD nominated tokenized bond. This new tokenized bond is locked up in a thedeposbank account for the required waiting period before a new dBond is issued as DUSD collateral.
Tokenized bond issuance on the EOS blockchain is an important milestone for the firm. Currently, EOS ranks as the #8 cryptocurrency in terms of market cap on CoinMarketCap. The coin has a market cap of $2,659,051,489 (334,977 BTC) with a 24-hour trading volume of $1,673,947,931.
Deutsche Bank Looks Towards the Digital Economy
EOS continues to position its organization to play a pivotal role in the digitization of the economy. When you consider that the EU market is set for a huge expansion in the blockchain financial sectors, both EOS and dBonds is a step ahead of the competition. You can expect to see dBonds expand upon this concept in the coming weeks.
FAT Brands turns to Cadence in $30M Bond Issuance
Investors hungry for profit need look no further than a recently announced bond issuance by FAT Brands restaurant chain, Fat Burger.
Made possible through a partnership with blockchain specialists, Cadence, Fat Burger is looking to tokenize and issue a $30 million bond.
This issuance will see investors afforded the opportunity to earn guaranteed returns on investment, as the bonds essentially represent a loan to Fat Burger.
While the intent of both Fat Burger and Cadence has been confirmed, the details and structuring of the event have not yet been divulged. This includes a variety of details such as repayment schedules, interest rates, terms, etc. What can be confirmed is that the digital issuance will take place on a public Ethereum blockchain, and will coincide with traditional paper-notes being issued as a ‘back-up’.
Speaking with Forbes, the CEO of FAT Brands took the time to comment on this decision for a bond issuance.
Andy Wiederhorn, CEO of FAT Brands, states,
“FAT Brands is working with Cadence as the lead arranger to do a whole business securitization…Similar to other issuances arranged by Cadence, a digital asset will be created that is a digital reflection of ownership for every investor in structured notes.”
In his discussion with the news outlet, he continued by explaining the thought process for turning to Cadence and blockchain technologies.
“The digital asset serves as a digital reflection of ownership and provides a level of transparency into the cap table of each structured note…Cadence has already issued 16 different structured notes to date as of the end of August, and so it is likely that investors who have invested in prior Cadence offering will be investing in this offering as well…By issuing this digital asset, Cadence provides a level of transparency into the cap table that has never existed before.”
One of eight restaurant chains owned by FAT Brands, FatBurger operates with over 200 locations throughout the United States.
CEO, Andy Wiederhorn, currently oversees company operations.
Founded in 2018, Cadence is a U.S. based company, operating out of New York City. The team behind the project has developed a platform targeting both institutional, and retail, investors. Their success over the past few years has notably resulted in the backing of industry giants such as Coinbase.
Company operations are overseen by Founder, Nelson Chu.
In Other News
The issuance of tokenized bonds is becoming a popular choice for a variety of companies. The following articles demonstrate various instances of big banks dipping their toes in the water, as their growing interest in the process becomes apparent.