As of mid-August 2019, the World Bank announced a second iteration of its blockchain bond issuance, bringing the total amount issued to $108 million (USD). The bonds have been created and managed through the use of blockchain technology, which will soon be used in the areas of settlement, custody, and regulatory compliance.
The World Bank’s Blockchain Bonds Explained
The World Bank recently raised $33.8 million (USD) in its
second round of issuing blockchain bonds.
The deal entailed the sale of a “blockchain-operated debt
instrument” (bond-i) per the Commonwealth Bank of Australia (CommBank), which
jointly oversaw the sale with RBC Capital Markets and TD Securities.
This brings the total value of World Bank-issued blockchain
bonds to $108 million (USD). The bonds utilize a private version of the
CommBank says the move entails “the first bond created,
allocated, transferred and managed through its life-cycle using distributed ledger
According to Andrea Dore, the World Bank’s head of funding,
“We are happy to see the continued, strong support and collaboration from investors and partners. The World Bank’s innovation and experience in the capital markets is key to working with our member countries to increase digitization to boost productivity in their economies and accelerate progress towards the Sustainable Development Goals.”
Sophie Gilder, head of blockchain and AI at CommBank, discussed the benefits that blockchain technology brings to bonds:
“CBA now has tangible evidence from our first bond offering using blockchain technology and subsequent bond management, secondary trading and tap issue via the same platform, that blockchain technology can deliver a new level of efficiency, transparency and risk management capability versus the existing market infrastructure.”
Gilder says the next step will entail
leveraging blockchain technology in the areas of settlement, custody, and
The World Bank isn’t the only financial
institution to integrate the emerging technology with bond issuance.
Earlier this year, French investment banking
Generale issued a €100 million covered bond as a security token on
In addition to bonds, security tokens
have been implemented in regulated real-world assets to include equity,
estate, and even fine
What do you think about the World Bank issuing
a total of $108 million worth of blockchain bonds? We’d like to know what you
think in the comments section below.
Image courtesy of the World Bank.