World Bank and Commonwealth Bank of Australia (CBA) collaborate on first bond on Blockchain. The technology is expected to facilitate the capital raise for bonds as well as improve the quality of transfers.
10 August, AtoZ Markets – The World Bank Group has collaborated with the Commonwealth Bank of Australia (CBA) in order to issue a bond using Blockchain technology for the first time ever.
World Bank and CBA collaborate on First Bond on Blockchain
The CBA is one of the “Big Four” commercial banks in Australia. It has stated in a release that it has won a mandate from the World Bank to organize the bond. This bond will be crated, transferred and managed through a Blockchain platform.
The technology has already been developed by the in-house Blockchain lab with the CBA. It will aim to have the primary parties in a bond issuance process, such as banks and investors, as participating nodes in a distributed network. Just like that, capital for the bond can be accumulated and transferred more efficiently.
The bond will be entitled the bond-I, while the issuance of the debt will see the input from Northern Trust, QBE Insurance and Treasury Corporation of Victoria. The treasurer of the World Bank, Arunma Oteh, has stated that the project is expected to be launched soon, as the organizations have been working on it for more than a year. However, there are no clear timeline and size of the bond were mentioned.
As per the release, the World Bank has issued $50 to $60 billion in bonds every single year as part of its plan to reduce poverty and advance sustainability for global markets.
Denis Robitaille, World Bank's chief information officer has commented on the development:
"This pioneering bond is a milestone in our efforts to learn how we can advise our client countries on the opportunities and risk that disruptive technologies offer as we strive to achieve the Sustainable Development Goals."
The CBA has explained that the technology is a private Blockcain that is built on top of the Ethereum network and has also been reviewed by the Microsoft. The news emerge following the CBA developing a Blockchain system for bond issuance back in December 2017.
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