The World Bank has announced that it has hired CBA, one of Australia’s biggest banks, to manage what it calls the “first bond globally to be created, allocated, transferred and managed” using a blockchain.
It is one of the clearest signs yet that distributed ledger technology, the decentralised way of storing and building blockchains, is going mainstream.
The bank, which issues between $50bn and $60bn annually in bonds to fund sustainable development in emerging economies, believes that blockchain technology can make the process more efficient by reducing the number of necessary intermediaries.
It did not say when bond-i, the new ‘blockchain operated new debt instrument’ apparently named after the Australian beach, will launch – but investor interest “has been strong,” according to a press release.
Using distributed ledger technology, best known for underpinning the bitcoin crypto-currency, would help simplify capital raising and trading and improve regulatory oversight, the World Bank and CBA said
“This pioneering bond is a milestone in our efforts to learn how we can advise our client countries on the opportunities and risk that disruptive technologies offer,” World Bank chief information officer Denis Robitaille said in a statement.
Sophie Gilder, head of blockchain at Innovation Labs CBA, added: “We know blockchain has the potential to revolutionise financial services and markets, and this transaction is a significant step towards that future state.
“By working collaboratively with the World Bank, we were able to find solutions to technical and legal considerations to make this ground-breaking transaction a reality.”
Unlike Bitcoin, where anyone can engage in mining, the process of verifying new transactions, the World Bank will use a private version of Ethereum in which validators must have permission. The computing infrastructure will run on Microsoft’s Azure cloud platform.
The idea of using blockchains to manage bonds is gaining traction. Last year, a company in the UK issued a bond using Ethereum’s public blockchain. The city government of Berkeley, California, is exploring the use of blockchain technology to issue municipal bonds.
The World Bank’s endorsement of the idea is the highest-profile one to date.
DigitalScotland 2022
25 Oct 2022
Why 2022 will be a significant year for digital learning
In 2022 the impact of technology in the classroom shows no sign of abating. The ‘pandemic years’ have proved critical in providing impetus for weaving and integrating powerful digital tools…
On the cyber horizon: predictions for 2022
As 2021 draws to a close, we see a world still challenged by Covid-19, necessitating new business models, new channels and a shift (perhaps for the long term) to remote…
Jude McCorry: “Focus on cyber strategy alone is not enough”
The number of cyber attacks has been on the rise since the start of the pandemic, with both international and domestic cyber criminals taking advantage of our increased reliance on…
Not a drop wasted: digital cask filling can save the whisky industry millions
Scotland’s food and drink sector is central to the country’s economy. Bringing in around £14 billion every year, it employs more than 115,000 people and accounts for one in five manufacturing…
The value of engineering in the curriculum
If you were to look back at the greatest discoveries in science and technology over the past 30 years, you would soon notice that engineering is a key catalyst for…
Glasgow Council leads the way in digital learning
In 2017, we at Glasgow City Council took the opportunity to overhaul our digital approach to education and redefine learning, keeping in mind the core aim of reducing the impact…
Why data is the new oil
In 2006, British mathematician Clive Humby coined the phrase, “Data is the new oil”. This analogy has been proven correct as data now powers entire industries and holds tremendous value…
Global Entrepreneurship Week offers chance to reset aspirations amid new innovation landscape
With the advent of Global Entrepreneurship Week, it is an opportunity for us to celebrate the innovators, the grassroots risk takers who drive the economy, and those who invest in…
