World Bank Taps Australia’s CommBank to Issue The First Blockchain Bond

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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 blockchain platform.

The technology, is 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, a capital for the bond can be raised and transacted in a more efficiently way.

Called bond-i, the debt issuance sees input from investors including Northern Trust, QBE Insurance and Treasury Corporation of Victoria.

World Bank’s treasurer Arunma Oteh said in this 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 each year as part of its mandate to reduce poverty and improve sustainability for worldwide markets.

World Bank’s chief information officer Denis Robitaille commented in the release:

“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 ETH  network and had also been reviewed by Microsoft regarding the platform’s architecture, security, and resilience.

News in December 2017 said 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 Morganthe Agricultural Bank of China, and BBVA, have already tested blockchain-based systems for bond and loan issuance.

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