World Bank has come up with a new idea of organizing an ETH blockchain bond, and it chose the CBA (Commonwealth Bank of Australia) to be its largest collaborator on the project. The bond is expected to bring anywhere from $50 million to $100 million.
World Bank Blockchain Bond Project
A recent announcement by the World Bank has stated that the bank had decided to partner up with the CBA and make it a sole arranger of the Ethereum blockchain bond. The bond is to be launched after the banks finish consulting their investors, and it is to be the first bond that will be allocated, managed, and transferred via the blockchain technology.
For now, the banks have not released a lot of details regarding the technical side of the bond. However, a few things are known, like the fact that its infrastructure is set to run on Azure’s cloud platform, courtesy of Microsoft itself. Additionally, Microsoft was also charged with carrying out a review of the blockchain-based platform that was created by the CBA. The company’s job was to determine the platform’s security and functionality.
According to the World Bank, the investors have expressed a lot of interest in the bond. The bond will also be denominated in Australian dollars.
Sustainable Development through Blockchain Technology
The World Bank is known for issuing large amounts for funding various projects. Usually, this amount is at $50-$60 billion annually. This has allowed it to be the leader in the field of financial innovation. Some of their achievements include issuing the first bond that was traded globally, back in 1989. Another one includes the first-ever electronic bond that came back in 2000.
Obviously, the bank is not shying away from technological progress, and now they are eyeing the blockchain technology. The bank’s recent statement claims that this tech has a large potential, especially when it comes to streamlining various processes among different intermediaries from the debt capital market. Through its use, things like security trade and capital raising can be significantly simplified. Additionally, regulatory oversight can be enhanced, and operational efficiencies can be improved as well.
Ethereum’s Development Community
The bond is to be classified as BOND-I (Blockchain Offered New Debt Instrument). All money that the banks manage to raise will go to various endeavors that have ties to the Reconstruction and Development division of the World Bank. However, the project will include additional collaborators as well. Those are the QBE, Northern Trust, as well as the Treasury Corporation of Victoria. The bank also employed a legal firm called King & Wood Mallesons to serve as an advisor for the bond’s legal framework.
Another comment regarding the new collaboration came from Arunma Oteh, the World Bank’s Treasurer. Apparently, the team has been working with the Commonwealth Bank of Australia for an entire year before being capable of launching the first transaction on the blockchain bond.
As for the CBA, they stated that they chose Ethereum for a simple reason, which is its large development community. This is the largest blockchain development community in the world, so it makes sense for the bank to choose a blockchain with so many dedicated developers. However, the bank also stated that they are open to additional options, and may switch to another blockchain in the future.
The world of blockchain technology is extremely diverse, and each of the blockchains is making their own progress at all times. If the banks estimate that another blockchain would better suit their needs at some point, they will be willing to switch to that one. The CBA is already familiar with the blockchain tech, and they have a significant amount of experience when it comes to its use. They used it in many projects already, the most recent one being shipping and tracking up to 17 tonnes of almonds.
Through collaboration with an entire group of leaders from the supply-chain industry, the bank employed the IoT products, smart contracts, and blockchain technology itself to monitor the shipment at all times during the entire voyage. As new possibilities like this present themselves, more and more entities from all corners of the world are becoming interested in the blockchain technology. And, as the tech continues its development, it can only be expected that it will attract even more attention in time.