World Bank Works With CBA to Issue The First Ever Blockchain Bond

World Bank has picked the Commonwealth Bank of Australia to prepare for the issuance of the first-ever blockchain bond. The Kangaroo bond, as all Australian foreign bonds are called, will be known as bond-i.

Bond-i refers to Blockchain Offered New Instrument. According to CBA, the Ethereum (ETH) blockchain will be responsible for carrying out the issuance of bond-i. Therefore, making it the first ever bond worldwide, to be developed, ran and transferred using the blockchain technology.

The blockchain is a technology that documents safely all the data carried out on the chain using a distributed ledger. It is synonymous with digital currencies such as Bitcoin (BTC). Meanwhile, Ethereum is the most active as well as the biggest established community in the world currently.

CBA has already created the said technology through its own blockchain lab. Consequently, Microsoft has reviewed the technology in terms of its design, security, and strength. Even though CBA is using Ethereum blockchain, it revealed that it is willing to try other options in the future.

CBA’s Head of blockchain, Sophie Gilder is optimistic that blockchain is able to become a future game changer in the financial services sector. She went on to say that the current bond issuance is a primary step towards that kind of future.

Main parties involved in the process of issuing the bond will benefit from the technology. For example, banks and investors can participate using nodes within the distributed ledger platform. Thus, raising and trading the bond’s capital in a very efficient manner.

CBA together with the World Bank recognizes that blockchain is capable of streamlining processes for both agents and market intermediaries regarding high debt capital. In a joint statement, the two said, “this can help simplify raising capital and trading securities; improve operational efficiencies; and enhance regulatory oversight,"

In December, last year, CBA disclosed that it was building a blockchain technology for issuing a bond. Although the bank did not reveal the name at the time it stated that it was working with a big brand. The partnership between CBA and the World Bank was instrumental in realizing legal and technical solutions. As a result, the two were able to deliver a successful project.

According to the World Bank, the bond is already receiving a huge interest from investors. However, in partnership with CBA, the bond will be launched after more consultation is done with several other investors.