The World Bank has mandated Commonwealth Bank of Australia to arrange the world’s first block chain bond.  This bond will be the first in the world to be created, allocated, transferred and managed with block chain technology, which is the technology that underpins cryptocurrencies like bitcoin, and refers to the distributed ledger technology that securely records all transactions made on the chain.  The securities will also be in Kangaroo bond format, a term for foreign bonds issued in Australia in the local currency, and has been named bond-i, an acronym which stands for Blockchain Offered New Debt Instrument.

A jointly-released statement from the World Bank and CBA expressed that “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,”  The supranational issues between $50 billion and $60 billion a year in bonds to back development in emerging economies.

Investor interest in the bond has thus far been strong, and although no size or date has been revealed for the issue, the intention is to launch the transaction after wider consultation with more investors.

 

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