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World’s first blockchain bond transaction to be launched

The World Bank together with the Commonwealth Bank of Australia (CBA) are planning to launch the first global bond, which will be facilitated through blockchain.

According to a joint release, indicative investor interest in bond-i (blockchain operated new debt instrument) has been strong.

Blockchain has the potential to streamline processes among numerous debt capital market intermediaries and agents.

This can help simplify raising capital and trading securities, improve operational efficiencies, and enhance regulatory oversight.

The World Bank boasted that it issues between $50-60 billion annually in bonds for sustainable development. Read more: Morocco to see world’s first utility-scale blockchain infrastructure

Arunma Oteh, World Bank treasurer, said: “Since our first bond transaction in 1947, innovation and investor satisfaction have been important hallmarks of our success with leveraging capital markets for development.

“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.

“We are therefore delighted that after working with our information technology colleagues and the Commonwealth Bank of Australia over several months, that we are now in a position to launch our first blockchain bond transaction. CBA’s commitment and Microsoft’s wealth of experience have been instrumental to achieving this historic milestone.”

Blockchain bond investors

Oteh extended appreciation to the pioneer blockchain bond investors, who are partnering with them on this transaction highlighting that this move has been motivated by their common desire to champion greater efficiency, and transparency as well as more robust issuance processes.

“Our goal is to continue to harness innovation for the benefit of markets and our mission of ending poverty and boosting shared prosperity,” he added.

Also commenting on the move was Denis Robitaille, World Bank Group’s chief information officer, who said: “Helping countries transition to technology-led development is key to our goals of reducing poverty and promoting lasting development. This is at the heart of the World Bank’s Innovation Lab—and 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.”

James Wall, executive general manager of institutional banking and markets international at CBA, added: “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 ground breaking as a demonstration of how blockchain technology can act as a facilitating platform for different participants. We are delighted to have partnered with the World Bank and fully support its 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 bond-i blockchain platform was built and developed by the CBA Blockchain Centre of Excellence. Since 2009, CBA has acted as lead manager for a number of IBRD bond issuances in the Australian and New Zealand capital markets. CBA’s dedicated blockchain team has taken a lead role in applying blockchain technology to capital markets.

Babalwa Bungane
Babalwa Bungane is the content producer for ESI Africa - Clarion Events Africa. Babalwa has been writing for the publication for over five years. She also contributes to sister publications; Smart Energy International and Power Engineering International. Babalwa is a social media enthusiast.