World Bank Selects Australian Bank for World’s First Blockchain Bond Running on Ethereum

Aug 10, 2018 at 23:02

The World Bank (WB) has selected the Commonwealth Bank of Australia (CBA), the country’s largest bank, for a mandate to become the sole arranger of a bond exclusively created and managed on the Ethereum blockchain.

In a statement released by the WB, the bond called ‘bond-i’ (Blockchain Offered New Debt Instrument)—will be the first global bond to be created, allocated, transferred and managed using the blockchain technology on Ethereum.

According to the statement, the bond will be issued and managed on a private Ethereum blockchain operated by the WB in Washington and CBA in Sydney.

Specifically, the WB will use Microsoft’s cloud computing platform Azure to run the bond in Washington.

The financial institution also defended that investors’ indicative interest in the blockchain-exclusive debt instrument has been strong in Australia.

“We believe that this transaction will be groundbreaking as a demonstration of how blockchain technology can act as a facilitating platform for different participants,” CBA general manager for international markets, James Wall expressed.

It can be recalled that the WB formed a mandate to provide loans for capital projects in countries around the world utilizing the blockchain technology’s potential to streamline processes in debt capital market intermediaries to improve operational efficiencies and regulatory oversight.

“Helping countries transition to technology-led development is key to our goals of reducing poverty and promoting lasting 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,” WB chief information officer, Denis Robitaille explained.

Likewise, other participants that will be involved in the development of the blockchain bond will include the Victoria state’s Treasury, asset manager giant Northern Trust and QBE, Australia’s largest global insurer.

It can be noted that the WB annually issues between $50 billion to $60 billion in bonds for sustainable development in emerging economies.