The World Bank has given the Commonwealth Bank of Australia (CBA), the country’s largest bank, the opportunity to become the sole coordinator of a bond exclusively developed and managed on a blockchain.
On Friday, the World Bank confirmed in a release that, known as ‘bond-I’ – Blockchain Offered New Debt Instrument- with a nod to Australia’s famous Bondi beach, the pioneering issue will be the ‘first bond globally to be created, allocated, transferred and managed using blockchain technology”.
After its launch, the bond will be released and operated on a private Ethereum blockchain managed by the World Bank in Washington and CBA in Sydney, the Australian ‘big four’ bank noted. Ethereum “offers the functionality” needed for the blockchain bond issuance whilst having “the largest and most active development community globally”, the CBA stated, maintaining those other blockchains will access it in the future.
To be precise, the World Bank will use Microsoft’s cloud computing platform Azure to operate the bond in Washington. The tech giant has already approved the Ethereum platforms operational “capabilities, securities and scale”, according to the World Bank.
The World Bank added, investors’ interest in the blockchain-exclusive debt instrument “has been strong”, choosing Australia’s CBA for the task in making easy and simple trading and capital raises.
James Wall, CBA general manager for international markets indicated that partnership will use the decentralized technology to improve the efficiency of financing for countries with extreme poverty.
“We believe that this transaction will be groundbreaking as a demonstration of how blockchain technology can act as a facilitating platform for different participants.”
According to the World Bank Group chief Information officer Denis Robitaille:
“Helping countries transition to technology-led development is key to our goals of reducing poverty and promoting lasting development… [T]his 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.”