The banker to the banks of world is looking all set to explor blockchain technology. World Bank is going to issue a $73 million bond on 28th of August in collaboration with Australia’s Commonwealth Bank (CBA) over blockchain, which will mark a historic event in the history of both World Bank and cryptocurrencies. CBA was chosen by World Bank as sole arranger of this bond, and given CBA’s interest and expertise in blockchain technology it was only obvious that blockchain found its place in this transaction.

The bond is engineered to provide a 2.2% annual return, and its maturity period is two years. Dubbed “Bondi”, it’s an experiment on World Bank’s and CBA’s part to find out whether blockchain can be used to automate the process of bond issuance or not.

The blockchain platform that will be used to issue this bond has been developed in-house by CBA. The Commonwealth Bank is highly optimistic about the success of this transaction, and it’s touting this thing as world’s first use of blockchain technology to raise money from public investors.

The transaction will be a part of bonds worth $50-$60 billion that are issued by World Bank every year to help battle with poverty and improve sustainability around the globe. World Bank’s bonds carry an AAA rating, and the bank uses its borrowing power to create new bond markets and shape the ways securities are issued. And the institution is claiming that just like its other bonds this one has also been received very well among the investors. World Bank Treasurer Arunma Oteh said about it:

“I am delighted that this pioneer bond transaction using the distributed ledger technology, bond-i, was extremely well received by investors. We are particularly impressed with the breath of interest from official institutions… these high-quality investors understood the value of leveraging technology for innovation in capital markets.”

If oversubscribed, the bond issue may actually raise much more than $72 million for World Bank. Based on initial interest CBA is pegging the amount at $80.48 million. The final amount will become clear only on 28th of August though.

This post is credited to crypto-news.in

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