Australia’s Commonwealth Bank has been selected by the World Bank to issue a ‘world first’ bond to be created, allocated, transferred and managed using blockchain technology.
The deal sees the Commonwealth mandated by the World Bank to be the sole arranger for the $A Kangaroo bond - referred to as the ‘bond-i’ blockchain offered new debt instrument.
Commonwealth Bank says the bond has been developed with the support and input of the investor community including Northern Trust, QBE and Treasury Corporation of Victoria – and once launched it will be issued and distributed on a blockchain platform operated by the World Bank and CBA in Washington and Sydney, respectively.
James Wall, Executive General Manager of Institutional Banking & Markets International, CBA said: “We take a collaborative approach to innovating and have a track record of partnering with other leading financial institutions, government bodies and corporates to innovate through blockchain”.
“We believe that this transaction will be groundbreaking as a demonstration of how blockchain technology can act as a facilitating platform for different participants.”
Wall said the CBA fully supports the World Bank’s vision of making innovative use of technology such as blockchain to increase the efficiency of financing solutions to better achieve their goal to end extreme poverty.
The CBA noted that, as part of its mandate to reduce poverty and promote lasting development, the World Bank issues between US$50-US$60 billion annually in bonds for sustainable development – and increasing its focus on helping countries transition to sustainable economies that are technology-led, while exploring the benefits of disruptive technologies, such as blockchain.
Sophie Gilder, Head of Blockchain, Innovation Labs, CBA said: “We know blockchain has the potential to revolutionise financial services and markets, and this transaction is a significant step towards that future state. By working collaboratively with the World Bank, we were able to find solutions to technical and legal considerations to make this ground breaking transaction a reality.
“Since our first bond transaction in 1947, innovation has been an important hallmark of our success with leveraging capital markets for development,” said Arunma Oteh, World Bank Treasurer.
“Given the transformative role of emerging technologies, we continue to prudently seek opportunities for us to meet investor needs as well as the needs of our clients. I am therefore delighted that after a year of working with Commonwealth Bank of Australia, we are in a position to launch our first blockchain bond transaction.”
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