Today, Commonwealth Bank of Australia announced the news on the initial blockchain bond via a news release on their official site.
The first bond transaction in the world is solely implemented using blockchain. World Bank assigns the deal to CBA for settling a pioneer bond issue to implement using blockchain. Their aim is to streamline the capital raising and trading as well. The Commonwealth Bank of Australia will arrange the first ever blockchain bond.
Australia issues Kangaroo bond which refers to the foreign bonds in the local currency. This bond has been given a name as “bond-I”. The acronym for Bondi stands for Blockchain Offering New Debt Instrument. However, this also resembles the Bondi Beach which is an iconic spot in Sydney.
The distributive ledger technology is responsible to create and manage Bondi. However, the technology which underpins cryptocurrency like bitcoin cites to the distributed ledger technology (DLT). This protects and records every transaction accomplished on the chain.
The CBA says; “The bond issuance will use the private Ethereum blockchain”.
The Bank states; currently, Ethereum has the largest and active development community, offering the features they require. However, other Blockchains are rapidly developing and CBA will keep open to other options in the future.
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This bond comes under AAA rated, and will focus to raise the capital for the Reconstruction and Development division of the World Bank. Also, the CBA spokesperson says that the bond is expected to raise in between $50-$100 million.
The Head of Blockchain at CBA, Sophie Gilder says:
We know blockchain has the potential to revolutionize financial services and markets, and this transaction is a significant step towards that future state. However, by working collaboratively with the World Bank, we were able to find solutions to technical legal considerations to make this groundbreaking transaction a reality.
Meanwhile, the World Bank is looking to launch the transaction together with CBA after more consultation with the investors.
The World Bank Treasurer, Arunma Oteh quotes:
After a year of working with Commonwealth Bank of Australia, we are in a position to launch our first blockchain bond transaction. Also, our sincere appreciations to our pioneer blockchain bond investors, who are partnering on this transaction to strengthen market enabling more robust issuance processes.
Finally, CBA has figured the solutions for technical and legal issues that can help make the transaction work. In addition to this, there was a news on CBA saying that they have completed the cross-border shipment utilizing blockchain to streamline shipping logistics and trace goods. However, the Commonwealth Bank of Australia is targeting to solve issues incorporating Blockchain technology.
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