What’s Going On?
The World Bank is expected to settle the first public bond created and managed using just blockchain next week in a $73 million deal designed to shake up bond sales practices.
Why Does It Matter?
Commonwealth Bank of Australia said the two-year bonds would settle on August 28th, 2018, reported Reuters.
The prototype deal has been dubbed a “Bondi” bond, an acronym for Blockchain Operated New Debt Instrument and also a reference to Australia’s most famous beach. It has been seen as an initial step in moving bond sales away from manual processes towards automation for benefits in speed and costs.
Where Will Blockchain Help?
James Wall, Executive General Manager at Commonwealth Bank of Australia, told Reuters: “You’re collapsing a traditional bond issuance from a manual bookbuild process and allocation process, an extended settlement then a registrar and a custodian, into something that could happen online instantaneously.”
World Bank areas of focus that could be helped by blockchain include land administration, health, education and carbon markets, reported Phys.org. Investors included Commonwealth Bank of Australia, First State Super, Northern Trust and the Treasury Corporation of Victoria. Commonwealth Bank of Australia is the sole manager of the deal.
The deal will be made as part of the $50–$60 billion in bond sales issued each year by the World Bank in a bid to combat poverty and improve sustainability for worldwide markets, reported CoinDesk.