Santander Confirms Fiat-backed Token Project on Ethereum Blockchain
Leading Spanish bank Santander announces its digital cash project on the Ethereum Blockchain.
Santander, a part of the Spanish Santander Group is now using the Ethereum Blockchain to develop a public digital cash system using the Ethereum Blockchain. Santander officials confirmed this project which will make the bank the first to use an existing public Blockchain for issuing digital currency.
The project was announced by Ethereum developer and founder of Ether.camp, Roman Mandeleil at Devcon-2 during a panel talk on Sep 20. Santander’s goal is to issue digital bank notes to the Blockchain community to encourage development and use of the token. This digital cash should be recognized and accepted by the bank’s various branches in the near future.
Cash ETH redeemable tokens
Mandeleil told IBTimes that the token itself is named “Cash ETH” and is fully backed by “real money” in Santander bank. He also added that all tokens are redeemable for fiat currency at any time. The funds will be all accessed through a Santander bank account and your wallet Ethereum address will be tied to your Santander token funds on the Ethereum Blockchain
"So it's not a gold reserve but it's a dollar reserve. So you are going to upload these tokens into the Blockchain and you are going to have the stability of real dollars or euros, and you are going to have the agility of Ethereum Blockchain."
To date, there are still several legals issues to work on including; negotiating with countries and regulators. They plan to start in one country and slowly grow because of the Ethereum Blockchain’s global access and the bank’s operations are only limited to countries that license it. Even with these limitations, Santander is going full steam ahead with the digital cash token.
Sigga Sigurdardottir, head of Santander’s Customer and Innovation stated:
“At Santander we work hard to ensure our banking is simple, personal, and fair. We believe the new Blockchain technology will play a transformational role in the way we achieve our goals and better serve our customers, adding value by creating more choice and convenience.”
Santander’s first international tests
Back in May, Santander UK started to use Blockchain technology for international transactions. The bank used Ripple’s Blockchain, which is a star-tup that the bank is supporting. It started off with a staff pilot app for transactions between £10 to £10,000 and the funds would end up in the receiver’s account in a day. Even though the speed is slower than usual Blockchain transactions, it is still faster than international bank transfers which take days.
The bank itself has gained an interest in Fintech 2.0 and believes that Blockchain technology will be dominating the Fintech sector with the cost-effective banking systems and open-source code that anyone can develop and play around with.
What’s next for Santander?
As Santander continues to develop their Blockchain transfer system on the Ethereum Blockchain, it is very likely that they will be working with the Ethereum and Ripple Blockchains to perfect the technology. This also means that Santander and its partners might be in a race with Barclays and Circle which the pair already offers sterling pound payments on a Blockchain.
So far, it seems that Ether.camp and Santander will be continuing their alliance in bringing high-speed Ethereum transactions to traditional banking. The pair have even said that they are planning to invite more banks to the project that is compared to UBS and Santander’s Universal Settlement Coin project. Furthermore, they also plan to host Blockchain-themed hackathons to discover more ways to use Blockchain in Fintech.