Our weekly list of announcements about how capital markets, financial institutions and regulators are engaging with digital assets.
TokenSoft announces security token support for transfer agents
Coinbase-backed TokenSoft announced the launch of its security token administrative panel, purpose-built for US transfer agents. TokenSoft clients will be able to select or partner with a transfer agent of their choice to issue and administer their security tokens. Using TokenSoft’s platform, Knox Wallet and security token standards like ERC-1404, transfer agents will be able to maintain and administer security tokens with the same controls and functionality as they do traditional securities.
“Since 2017, ensuring our clients can easily comply with securities laws has been our number one priority and that’s why today we’re announcing official support and a full set of features for SEC-registered transfer agents and their issuing clients,” said Mason Borda, CEO of TokenSoft, in a statement.
Santander launches end-to-end blockchain bond
Banco Santander announced that it has issued an end-to-end blockchain bond. The bank issued the bond directly onto the blockchain and the bond will also continue to exist only on the blockchain, described in a company statement as “a first step towards a potential secondary market for mainstream security tokens in the future”.
Banco Santander is itself the issuer of the $20 million bond, while one of the Group’s units purchased the bond at market price. The bond carries a quarterly coupon of 1.98%. Santander Securities Services is acting as tokenization agent and custodian of the cryptographic keys. Santander Corporate and Investment Banking (CIB), the bank’s global division that supports corporate and institutional clients, acted as dealer for the issuance, continuing the work which started in Santander’s blockchain lab in 2016.
Santander used the public Ethereum blockchain, one of the more advanced open source blockchain technologies. This allows Santander to achieve the milestone of tokenizing the bond securely and registering it in a permissioned manner on the blockchain. The cash used to complete the investment (on-chain delivery-versus-payment) and the quarterly coupons have also been tokenized, i.e., represented digitally on the blockchain. Thanks to this automation, the one-year maturity bond has reduced the number of intermediaries required in the process, making the transaction faster, more efficient and simpler. The goal for Santander CIB is to engage with our most innovative clients as we move from the project stage to product development.
For this project, Santander received support from London-based startup Nivaura, a regulated fintech company that digitizes and automates key processes in capital markets and the recipient of funding from Santander InnoVentures, the $200 million venture capital fund.
SALT accepts NYDFS-regulated PAX Gold as crypto collateral
Crypto-backed lending firm SALT announced that it will offer the just released PAX Gold (PAXG) as a collateral type for clients seeking to use their digital assets as collateral to secure a USD loan. PAX Gold, an asset-backed digital token on the Ethereum blockchain recently regulated by the New York Department of Financial Services, is Paxos’ first blockchain asset to represent precious metal; its value is tied directly to the spot price of gold quoted by the London gold market. With the addition of PAXG, SALT now offers loans collateralized by Bitcoin, Litecoin, Ethereum, Dash, DOGE, BCH, PAX Standard, USDC, and USDT.
Jenny Shaver, SALT’s COO, said in a statement: “Gold has traditionally been held as a hedge against inversely correlated assets like stocks and fiat currency, so it provides digital token holders with familiar asset diversification options.” With the addition of PAXG, SALT customers will have a wider variety of collateral options, and by using PAXG as their primary collateral, they will be able to maintain a more stable Loan-to-Value Ratio for the duration of their loan, according to a company statement.