The World Bank is gearing up to bring you its first blockchain bond. The bond is dubbed bond-i will be managed exclusively using Distributed Ledger Technology which powers cryptocurrencies such as bitcoin. The Commonwealth Bank of Australia is the sole arranger of the product.
No date has been provided yet regarding its launch. This is just another instance of a major institution adopting blockchain for a wide variety of uses. While the hype has largely been concentrated on cryptocurrencies, blockchain technology is slowly proving itself in a wide variety of sectors.
Only last week, Microsoft unveiled its blockchain-as-a-service product that will allow enterprises to manage certain functions such as employee remuneration or logistics.
The World Bank will use a private blockchain based on Ethereum developed by the Central Bank of Australia.
Investor Interest
In the case of the World Bank, investor interest led it to the decision to roll out the new debt instrument. The lender is however not new when it comes to trying out new technologies in some of its products. It points out that it was the first to issue bonds in a global format as early as 1989.
It was also the first to offer the e-bond when the internet was just taking off in the early 2000s.
“Since our first bond transaction in 1947, innovation and investor satisfaction have been important hallmarks of our success with leveraging capital markets for development. Today, we believe that emerging technologies, equally offer transformative, yet prudent possibilities for us to continue to innovate, respond to investor needs and strengthen markets,” WB Treasurer Arunmah Oteh said in a statement.
The bond-i will now help the lender streamline its processes especially in the management of debt, improve operations and strengthen its oversight role.
The World Banks says it issues between $50 billion and $70 billion annually in bonds for sustainable development.
“Helping countries transition to technology-led development is key to our goals of reducing poverty and promoting lasting development,” Denis Robitaille, World Bank Group Chief Information Officer said