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World Bank launches first global blockchain bond-i and raises AU$110 million

Aug 28, 2018

The World Bank created bond-i (blockchain operated new debt instrument), the world’s first bond to be created, assigned, transferred and administered through its life cycle using distributed ledger technology (blockchain).

The bond raised AU$110 million, marking the first time that investors have supported the World Bank’s development activities in a transaction that is fully managed using the blockchain technology, as was stated in press release of the World Bank.

The World Bank authorized Commonwealth Bank of Australia (CBA) as arranger for the bond at the beginning of August 2018. The authorization statement was followed by a two-week consultation interval with the market and key investors indicating strong assist for the issuance.

Among investors of the bond are CBA, First State Super, NSW Treasury Corporation, Northern Trust, QBE, SAFA, and Treasury Corporation of Victoria. CBA and the World Bank will persist to welcome investor interest in the bond throughout its life cycle, as well as inquiries from other market players in terms of the platform.

The platform was created and constructed by the CBA Blockchain Centre of Excellence, located in the Sydney Innovation Lab. This project is based on the influence and experience of CBA’s dedicated blockchain unit, which has taken a main role in applying blockchain technology to capital markets.

It is worth mentioning that independent service providers of the bond include TD Securities, IHS Markit, Microsoft, and King & Wood Mallesons.

The World Bank regards blockchain as having the possibility to simplify processes among numerous debt capital market intermediaries and agents.

However, some financial organizations stay skeptical as to the actual advantages of distributed ledger technology. For instance, in June 2018, the Netherlands central bank (DNB) announced the results of a number of researches, concluding that blockchain is unable to meet the needs of financial markets infrastructure (FMI).

Stay tuned with Offshorelicense to be informed of all legal news in relation to blockchain, legaltech and other digital industries.

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