CBA gets into debt over blockchain for World Bank

Irving Hamilton
August 10, 2018

The worldwide lender is planning to issue what it says is the world's first global blockchain bond, a notable mainstream endorsement of the emerging technology. The bond, known as bond-i (in reference to the famous beach I assume), or 'Blockchain Offered New Debt Instrument' will be the first of its kind to be made and managed using blockchain technology. 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.

The private Ethereum blockchain will be co-operated by the World Bank in Washington, U.S.

CBA has stated that Ethereum has the "the largest and most active development community globally".

This is the first time the World Bank has ventured into blockchain technology. Its infrastructure is to be handled through Microsoft's Azure cloud computing system by way of a data center in Washington DC. The move to push blockchain technology into banking comes from the fact that CBA intends to start settling equities trades from 2020 for cost-cutting, according to Reuters' report. "This can help simplify raising capital and trading securities; improve operational efficiencies; and enhance regulatory oversight".

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"We are delighted to have partnered with the World Bank, and fully support its vision of making innovative use of technology such as blockchain to increase the efficiency of financing solutions to better achieve their goal to end extreme poverty", Wall said. 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".

Australia's largest bank says it's latest blockchain foray will substantially streamline capital raising processes in the debt capital markets which are now made up of a complex web of interconnected agents and intermediaries. Finally, this also opens up borders and provides banks with a new and more efficient method through which bonds can be serviced, on an global level.

Every year, the World Bank issues between US$50 billion-$60 billion in bonds for sustainable development in emerging economies.

"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.

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