Commonwealth Bank of Australia (CBA) has been mandated by the World Bank to arrange issue of the world’s first blockchain-based bond. According to a press release, CBA will reportedly arrange the first bond globally to be “created, allocated, transferred, and managed using blockchain technology.”
The new blockchain-based debt instrument, termed ‘bond-i,’ will be issued and distributed on a blockchain platform under the operation of the World Bank in Washington, and CBA in Sydney. Although the two banks are using Ethereum blockchain, the CBA “remains open” to alternatives as “other blockchains are developing rapidly.”
“We believe that this transaction will be groundbreaking as a demonstration of how blockchain technology can act as a facilitating platform for different participants,” James Wall, CBA Executive General Manager of Institutional Banking & Markets International, said.
The initiative is expected that blockchain technology will simplify capital raising, trading securities, speed up operations, and “enhance regulatory oversight.” The World Bank issues $50-60 billion in bonds per year for sustainable development in emerging economies.
As a reminder, in July, CBA delivered a 17 ton shipment of almonds to Europe using its new blockchain platform to track the cargo from Melbourne to Hamburg, Germany. The platform is underpinned by Distributed ledger technology (DLT), Internet of Things (IoT), and smart contracts.