Technology and its evolution are increasingly allowing the application of smart contracts in business, which are reaching all parts of the world. In the banking sector, international commercial transactions are already being officially carried out on a blockchain platform. Such is the case of Banco Santander, which has just announced its first operation in a blockchain through a smart contract.
As we have witnessed in recent years, financial institutions have made possible live exchanges through smart contracts, moving a little closer to the true future of the economy and business. To carry out these operations, they are executing transactions through the we.trade platform for financing open account trade.
The president of Banco Santander, Ana Botín, recently reported that the bank has successfully completed its first transaction through the we.trade platform, using a Smart Contract between a home customer and another from the Swedish bank Nordea Bank.
Botín said on his Twitter account that he was very pleased to have carried out this process. He even described his experience with a BPU (Bank payment undertaking), talking about his resemblance to a letter of credit with automated payment thanks to Smart Contracts.
Botín decided to share a tweet published in July of last year, which explained that when operating in normal situations, we use letters of credit in order to address the problem of trust and give funding flow. During that opportunity, she declared that distances in Europe figure as one of the problems, since being so small, they fail to arrive first than products, that is, before a LoC (Line of Credit) is processed, in addition to high costs. Once raised in this way, it can be understood that 80% of financial cases in banking institutions are based on trust.
“The solution of we.trade is that it uses smart contracts that are automatically executed through the banking system when certain conditions are met. In addition, participants know that their banks have identified everyone in the network, as well as the whereabouts of the assets.”
She also stressed that Santander as a provider of banking services for SMEs, is part of the we.trade consortium. In fact, it began more than a year ago in a pilot project to serve customers in Spain, but this operation with Norde, implies that it expanded its implementation.