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Binance Research: Blockchain Bonds to Become New Standard


Binance Research, the market research and analysis arm of Binance, has published a new report on the latest issuance of bonds by Santander, one of the leading European banks, on Ethereum. “Eventually, blockchain bonds should gradually become a new standard in the fixed-income industry,” according to the new report titled “Case Study on Santander’s Latest Bond Issuance on Ethereum.”

On September 12, Santander issued tokenized bonds on the Ethereum blockchain with a total value worth USD 20 million. The issuance is part of the recent trend of tokenization of blockchain bonds from financial and public institutions like Societe Generale and the Austrian government, the report stated.

According to Binance Research, fixed-income issuances on the blockchain provide several benefits for both investors and issuers such as:

  • a drastic reduction of counterparty risk owing to atomic hashed time-locked contracts.

  • operational improvements resulting in reduced issuance costs and faster execution.

  • added-value services such as easier taxation for and improved oversight about current debt holders.

However, Binance Research noted that Santander still held off-chain legal documents with a trusted custodian and was not issuing “native” securities on Ethereum. “Moreover, they did not publicly release the contract source code, outweighing some of the presumed benefits from the use of blockchain technology,” according to Binance Research.

Read the full report here.