The World Bank announces plan to release the world's first blockchain bond

Marco Green
August 12, 2018

"Once launched the bond will be issued and distributed on a blockchain platform operated by the World Bank and CBA in Washington and Sydney, respectively". A news release issued by the worldwide financial institution earlier today on August 10 says that it has given the Commonwealth Bank of Australia (CBA) authority to start the issuance of bonds exclusively on blockchain. In that instance, QTO had used CBA's private blockchain platform to generate a bond tender, view investor bids in real time, finalize investment allocation, and settle instantly with investors.

The World Bank says it now expects other issuing banks to enter the market with their own blockchain-based bonds.

Blockchain is expected to streamline processes between debt capital market intermediaries and agents.

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CBA general manager for global markets James Wall heralded the partnership for using the decentralized technology to increase the efficiency of financing for countries with extreme poverty.

The bond-i blockchain platform was built and developed by the CBA Blockchain Centre of Excellence.

"Today, we believe that emerging technologies, equally offer transformative, yet prudent possibilities for us to continue to innovate, respond to investor needs and strengthen markets", stated Arunma Oteh, Treasurer at the Wold Bank. According to CBA, the aim of Bond-I is to have key parties in a bond issuance process such as investors and banks nodes to participate in a distributed network, enabling more efficient transaction and capital raising process. "Already some central banks are assessing how they can use blockchain for settling transactions", said the World Bank's manager of treasury asset and liability operations, Paul Snaith. As a frequent issuer in the Australian dollar market, it has since 1986 raised almost A$60 billion from investors globally.

The CBA said it had found solutions to technical and legal issues to make the transaction work. An independent review has been conducted by Microsoft of the CBA blockchain architecture, security and resilience.

It noted that it issues anywhere from $50 billion to $60 billion in bonds annually and prides itself on being an innovator in the capital markets.

Other reports by Click Lancashire

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