CBA wins World Bank’s mandate to issue world’s first bond on Ethereum blockchain
World Bank has mandated only the Common Wealth Bank of Australia [CBA] to issue bond based on Ethereum blockchain. On 10th August, 2018 in a press release it is informed that by leveraging the Ethereum platform, a bond would be created for the first time with its exclusive responsibility given to CBA.
The foreign bonds which are issued in Australia in its local currency is known as the Kangaroo bond. It is also known as the bond-i implying Blockchain Offered New Debt Instrument. According to the statement of Common Wealth Bank of Australia, once the bond is launched, the Ethereum blockchain would be look into its issuance and management . CBA and World Bank based in Sydney and Washington, respectively will be operating the private blockchain technology.
CBA has stated that Ethereum has the “the largest and most active development community globally.” Along with it, this blockchain technology “offers the functionality” necessary for issuing the blockchain bond. CBA has further informed that the bond would welcome other blockchain technologies in the future times.
In Washington, bond can run by World Bank using Microsoft's Azure, a cloud computing platform. World Bank has stated that Microsoft, the global tech giant ensured a proper validation of the operational “capabilities, security and scale” of Ethereum.
Benefits on the Ethereum blockchain
A statement from the World Bank and CBA's press release says, "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."
James Wall, the general manager at CBA has asserted that the common ground of the new collaboration, decentralised blockchain technology, would upgrade the financial supplies to nations struck with high level of poverty. As per the release, he has stated, "We believe that this transaction will be groundbreaking as a demonstration of how blockchain technology can act as a facilitating platform for different participants.”
He has also mentioned that the technology will also “enhance regulatory oversight.” Each year, records suggest that the World Bank has issued $50-60 billion in bonds to achieve the goal of sustainable development in the developing nations.
World Bank has also clarified that the interest of the investors in these bonds ''has been strong,'' so far. Denis Robitaille, the chief information officer of the World Bank Group has commented, “Helping countries transition to technology-led development is key to our goals of reducing poverty and promoting lasting development…[T]his 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.”
Victoria state's Treasury, QBE, the largest insurer, worldwide based in Australia and Norther Trust, a prominent name as an asset manager are other significant names associated in this venture of developing blockchain bond.
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