The World Bank Group has partnered with the Commonwealth Bank of Australia to issue a bond using blockchain.
The CBA, one of the "Big Four" commercial banks in Australia, said in a release on Friday that it had won a mandate from the World Bank to arrange the issuance of the bond, which will be created, transferred and managed via a blockchain platform.
The technology, already developed by CBA's in-house blockchain lab, aims to have key parties in a bond issuance process such as investors and banks to be participating nodes in a distributed network.
In this way, capital for the bond can be raised and transacted more efficiently.
World Bank's treasurer Arunma Oteh said in the release that the technology is in the position for the launch after a year of working with the CBA. That said, the issuance timeline and size of the bond remain unknown at this stage.
According to the release, the World Bank issues $50 to $60 billion in bonds every year as part of its mandate to reduce poverty and improve sustainability for worldwide markets.
"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."
The CBA, which designed and developed the technology, said it is a private blockchain on top of the ethereum network and had also been reviewed by Microsoft regarding the platform's architecture, security, and resilience.
The announcement follows news in December 2017 that the CBA was developing a blockchain system for bond issuance in collaboration with a "Major world issuer," whose name was not disclosed at the time.
Currently, several major financial institutions in the world, such as JP Morgan, the Agricultural Bank of China, and BBVA, have already tested blockchain-based systems for bond and loan issuance.
World Bank Taps Australia's CommBank to Issue Its First Blockchain Bond
Published on Aug 10, 2018
by Coindesk | Published on Coinage
Louis Vuitton Owner LVMH Is Launching a Blockchain to Track Luxury Goods
Luxury brand conglomerate LVMH, owner of the iconic Louis Vuitton label, is preparing to launch a blockchain for proving the authenticity of high-priced goods, CoinDesk has learned.
TrueUSD Stablecoin Holders Can Get 'Up to 8%' Interest Via CredEarn
Holders of the dollar-pegged stablecoin TrueUSD can now leverage their funds to generate returns under a new partnership between the token's developer TrustToken and crypto lender Cred.
Binance Tightens Compliance, Turning to IdentityMind for KYC
The world's largest cryptocurrency exchange Binance is moving to boost compliance and data security through a new deal with Medici Ventures portfolio firm IdentityMind.
E-Commerce Giant Rakuten Wins License for New Crypto Exchange
Japan's top financial watchdog has granted a license to a cryptocurrency exchange being relaunched by e-commerce giant Rakuten.