The World Bank (WB) authorized Commonwealth Bank of Australia (CBA) to issue the world's first bonds based on blockchain technology, a banks’ joint press release stated.
Australian bank received permission to become the sole organizer of the world's first bonds to be issued, distributed, transferred and managed using distributed ledger system. The new blockchain based debt instrument will be called "bond-i". It will be launched after consulting with a wide range of investors, who show great interest in it. The platform for "bond-i" was developed by CBA Blockchain Advanced Technologies Center The offer was developed with the contribution of Northern Trust, QBE and Treasury Corporation of Victoria. The World Bank has been working in the debt capital markets for 70 years and annually issues bonds in the amount of $50 to $60 billion. The bank was the first in the world to issue an electronic bond (e-bond) in January 2000.
WHY IS IT IMPORTANT?
1. Blockchain technology has the potential to optimize the processes occurring between numerous intermediaries and agents of the debt capital market. It can help to simplify the attraction of capital and trade in securities, improve efficiency and strengthen regulatory oversight,
2. World Bank groundwork for the bond will be based in Washington, D.C. on the Microsoft Azure distributed cloud blockchain. Microsoft approved the framework's operational abilities, security and scale.
Blockchain technology makes it possible to organize a decentralized registry or database, the information which is stored not on a single server, but on a variety of different computers. This technology, in particular, operates a database where information on bitcoin transactions is stored. According to some experts, the technology allows to seriously optimize costs of business and the state. In particular, it helps to conduct online payments, promptly confirm customer relevance or transaction data, register transactions and maintain their ledger.