The World Bank has raised A$110 million to launch the world’s first bond created and managed via blockchain.
CommBank is the sole arranger of Bond-i (Blockchain Offered New Debt Instrument), a bond created, allocated, transferred and managed through its life cycle using distributed ledger, on behalf of its client the World Bank.
Bond-i is issued and managed on a private Ethereum blockchain operated by the World Bank in Washington and the CommBank in Sydney.
The bond-i blockchain platform was built and developed by the CommBank Blockchain Centre of Excellence, housed in the Sydney Innovation Lab. Earlier this month the Australian bank announced it had been selected by the World Bank to issue the blockchain bond after more than 12 months of development.
“Since announcing the mandate, the interest we’ve received for bond-i has been overwhelming. It is clear the market is ready and open to the uptake of emerging technologies and sees the potential evolution of the capital markets,” said James Wall, Executive General Manager of IB&M International, CommBank.
Investors in the two year bond include CBA, First State Super, NSW Treasury Corporation, Northern Trust, QBE, SAFA, and Treasury Corporation of Victoria.
“I am delighted that this pioneer bond transaction using the distributed ledger technology, bond-i, was extremely well received by investors,” said Arunma Oteh, World Bank Treasurer.
“We are particularly impressed with the breath of interest from official institutions, fund managers, government institutions, and banks. We were no doubt successful in moving from concept to reality because these high-quality investors understood the value of leveraging technology for innovation in capital markets.”
The bond-i bond forms part of a broader strategic focus of the World Bank to harness the potential of disruptive technologies for development.
In June 2017, the World Bank launched a Blockchain Innovation Lab to understand the impact of blockchain and other disruptive technologies in areas such as land administration, supply chain management, health, education, cross-border payments, and carbon market trading.