Commonwealth Bank of Australia to create the world's first blockchain bonds

CBA wins World Bank’s mandate to issue world’s first bond on Ethereum blockchain 20779

CBA gets into debt over blockchain for World Bank

It is expected that once launched, the bond will be issued and distributed on a blockchain platform operated by the World Bank and CBA in Washington and Sydney, respectively. Now, it is getting ready to issue the world's first Blockchain bond upon being mandated by the World Bank.

As mentioned in the joint release, both institutions admitted that blockchain technology has the capabilities to streamline the process for numerous debt capital market intermediaries and agents, which help in simplifying raising capital and trading securities, improving operational efficiencies, and enhancing regulatory oversight.

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Other participants involved in the development of the blockchain bond will include the Victoria state's Treasury, asset manager giant Northern Trust and QBE, Australia's largest global insurer.

The World Bank issues between $US50 billion and $US60 billion ($67 billion to $81 billion) a year in bonds - effectively IOUs - to back development in emerging economies. It has a 70-year track record of innovation in the capital markets. The team at CommBank has carried out intensive research and analysis to ensure that the bond issuance is carried out smoothly. This would force Australia's Reserve bank to form a digital version of the Australian dollar, apart from other things.

World Bank Treasurer Arunma Oteh said in a statement that the bank is continuing to "prudently seek opportunities for us to meet investor needs as well as the needs of our clients".

Bonds are complicated and quite often boring - but they're also a vital instrument in the financial mix that lets countries and corporations raise and shift around big pools of cash.

CBA will organise for the bond to be created, allocated, transferred and managed throughout its lifecycle.

For a long time, CBA's Blockchain Centre of Excellence is putting great efforts to bring blockchain technology to capital markets.

The CBA said it had found solutions to technical and legal issues to make the transaction work.

The Kangaroo bond goes by the name of 'bond-i, ' which stands for 'blockchain-offered new debt instrument'.

The World Bank, which has been issuing bonds since 1947, now allocates around $50-$60 million in debt instruments to help sustainable development projects in various countries.

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