The World Bank has chosen the blockchain-savvy Commonwealth Bank of Australia to arrange what is says will be the first bond to be “created, allocated, transferred and managed through its life cycle” using distributed ledger technology.
The Ethereum blockchain-based bond will be denominated in Australian dollars. Proceeds will go toward sustainable development initiatives. The new bond will officially be classified as a “bond-I,” for Blockchain Offered New Debt Instrument.
According to its press release, the World Bank, which issues US$50 billion to $60 billion a year in bonds for sustainable development, says blockchain “has the potential to streamline processes among numerous debt capital market intermediaries and agents. This can help simplify raising capital and trading securities; improve operational efficiencies; and enhance regulatory oversight.”