Spanish bank to use ethereum blockchain as a test for transactions

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Banco Santander of Spain is working on a project to investigate how it can let customers convert money into tokens on the public ethereum blockchain. The ‘CashEth’ must be exchangeable again for ‘normal’ money. The system was shown at DevCon2 in Shanghai.

The tokens are backed by ‘real’ money at the bank, such as euros and dollars, and are primarily intended to carry out microtransactions, for example to pay small amounts for reading a news article without incurring a fee. is associated with, International Business Times writes.

The bank presented the system at Devcon2 together with EtherCamp, which, among other things, also built the ethereum javascript environment under the direction of Roman Mandeleil. In one example, Mandeleil showed a Santander bank account with an ethereum button, which means that an ethereum account exists on the ethereum network parallel to the bank account.

According to Mandeleil, this allows the bank to provide “nice features” to customers, such as placing a “bundle of dollars” in a frozen account that gives the customer a certain amount of tokens backed by the dollars in reserve. This makes the token as stable or unstable as the euros or dollars it represents, without being tied to the rate of ether, the digital currency of the ethereum blockchain.

Source: Coindesk

According to Madeleil, the bank’s team has been working on it for nine months, including legislation and regulations. That is why it is not yet clear where Santander will start with the first tests, because so much depends on the laws and regulations of the country itself. Mandeleil hopes it will go live in the coming year.

In order to be able to execute transactions, the development team was allowed to see ‘all the bank’s APIs’ to ensure correct compliance with rules. The next step is to open up the api of the system between the bank and the blockchain itself to developers.

The bank’s head of research and development, Julio Faura, told IBTimes that it should be very clear that it is not about linking bank accounts to ‘cryptocurrency like bitcoin’ and that the tokens are fully backed by a regular account. This way of dealing with currency is not yet for the ‘big money’, Faura continues. The bank is also working on the so-called Settlement Coin project that is supposed to work as a kind of ‘pseudo-central bank’, but the amounts are many times higher than with regular customers.

Devcon2 is an ethereum conference aimed at developers and taking place in Shanghai, China.

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