World Bank, Commonwealth Bank Team up on Blockchain Sustainable Development Project
The World Bank has chosen the Commonwealth Bank of Australia to help organize a new Ethereum blockchain bond denominated in Australian dollars. The bond is projected to raise between $50-$100 million, and proceeds will go towards sustainable development initiatives.
The World Bank recently said they have chosen the Commonwealth Bank of Australia (CBA) to become the sole arranger of a new blockchain bond that will be issued on Ethereum. Both entities are set to launch the bond after consulting with investors.
There isn’t much detail regarding the technical details of the bond itself, but the infrastructure is currently set to run on Microsoft Azure’s cloud platform, according to the MIT Technology Review.
Microsoft also carried out an independent review of CBA’s blockchain platform to gauge functionality and security.
The World Bank said via press release that indicative investor interest in the bond has been strong, while pointing out how they have frequently issued in the Australian dollar market.
Blockchain for Sustainable Development
The World Bank issues $50-$60 billion dollars in bonds on an annual basis to help fund projects.
As a result, the global financial giant has often been at the forefront of financial innovation. The Bank issued the first globally traded and settled bond in 1989, as well the first electronic bond in 2000.
Now, the World Bank observes that 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.
Open to Other Possibilities
The new bond will officially be classified as a “bond-I” (Blockchain Offered New Debt Instrument.)
Money raised from the new blockchain bond will go towards endeavors tied to the World Bank’s Reconstruction and Development division.
Additional collaborators for the project include Northern Trust, QBE, and the Treasury Corporation of Victoria. Legal firm King & Wood Mallesons also advised on the legal framework for the bond issuance and acted as deal counselor.
World Bank Treasurer Arunma Oteh said the team worked with CBA for a year before they were in a position to actually launch the first blockchain bond transaction.
The CBA said they chose Ethereum due to having “the largest and most active development community globally,” but noted how they are open to other options in the future since the blockchain word is developing at a fast rate.
The CBA has also been using blockchain technology for a range of other projects. They recently shipped and tracked seventeen tonnes of almonds. Accompanied by a group of supply-chain industry leaders, the bank used blockchain, smart contracts, and the IoT, to carefully monitor the almond supply chain.
Blockchain has gained more and more attention across various industries, especially as the technology continues to develop.
What are your thoughts on the World Bank’s blockchain development plans? Let us know in the comments below!
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