World Bank turns to CBA for world’s first blockchain bond
The World Bank (International Bank for Reconstruction and Development, IBRD) has mandated the Commonwealth Bank of Australia (CBA) as the sole arranger of the first bond globally to be created, allocated, transferred and managed through its life cycle using distributed ledger technology (DLT).
According to the duo, indicative investor interest in bond-i (blockchain operated new debt instrument) has been “strong”. The duo expects to launch the transaction following a period of consultation with a “broader set” of investors.
Arunma Oteh, World Bank Treasurer, says it worked with information technology colleagues and the CBA over several months on the project.
James Wall, executive general manager of international, CBA, adds that blockchain can “increase the efficiency of financing solutions to better achieve [World Bank’s] goal to end extreme poverty”.
Blockchain will be used to streamline processes among numerous debt capital market intermediaries and agents.
The World Bank issues between $50-$60 billion annually in bonds for sustainable development.
It cites its 70-year track record in the capital markets. Such as a globally traded and settled bond issued in September 1989; and the first e-bond issued in January 2000. As a frequent issuer in the Australian dollar market, it has since 1986 raised nearly AU$60 billion ($43.7 billion) from investors globally.
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.
World Bank infrastructure for the bond will run in Washington, DC on the Microsoft Azure cloud computing platform. Microsoft validated the system’s operational capabilities.
The World Bank provides loans, guarantees, risk management products, and advisory services to middle-income and “other creditworthy countries” to support its “sustainable development goals and to end extreme poverty and promote shared prosperity”.
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