Home / Crypto Currency / Commonwealth Bank of Australia Partners With World Bank to Issue First-Ever Blockchain Bond

Commonwealth Bank of Australia Partners With World Bank to Issue First-Ever Blockchain Bond

The Commonwealth Bank of Australia (CBA) has been mandated by the World Bank to issue the world’s first bond created, allocated and managed on the blockchain. Once issued, the bond will be managed by the World Bank in Washington and CBA in Sydney over a private Ethereum-based blockchain, with CBA stating that it remains open to any other project that can offer a better alternative. CBA has been a firm believer in blockchain technology, recently announcing that it had conducted a successful blockchain-based shipment of almonds between Australia and Germany.

Embracing Emerging Technology

The new Kangaroo bond will be known as the Blockchain Offered New Debt Instrument (bond-i) and will be denominated in AUD. A Kangaroo bond is a foreign bond issued in Australia that’s denominated in the local Australian dollar. According to a press release from the bank, the project is a collaboration between the bank and a number of investors which include the Treasury Corporation of Victoria; Australia’s largest insurer, QBE Insurance; and Chicago-based financial services giant Northern Trust.

The issuing of a blockchain-based bond was necessitated by strong investor interest, the World Bank noted. The bank, which issues up to $60 billion in bonds annually for sustainable development, is confident that blockchain technology can greatly improve the bond issuance process.

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.

A blockchain-issued bond is just the latest in a string of pioneering moves made by the Washington-based financial institution. In a bid to help countries transition to technology-led sustainable economies, the World Bank is always at the forefront of embracing emerging technologies into its operations. It was the first bank to issue a globally traded and settled bond in 1989, and it introduced the first fully integrated electronic bond in 2000. It’s the blockchain’s turn now, stated the World Bank’s treasurer, Arunma Oteh.

Today, we believe that emerging technologies equally offer transformative yet prudent possibilities for us to continue to innovate, respond to investor needs and strengthen markets. We are therefore delighted that after working with our information technology colleagues and the Commonwealth Bank of Australia over several months, we are now in a position to launch our first blockchain bond transaction.

The bond-i blockchain platform – bond-i also refers to the iconic Australian Bondi beach – was developed by CBA’s Blockchain Centre of Excellence, with Microsoft as its technology partner. The center has been conducting research and development of blockchain solutions for a diverse range of industries ranging from banking to supply chain management.

Two weeks ago, CBA announced in a press release that it had successfully shipped and tracked 17 tons of almonds on a blockchain platform from Victoria, Australia to Hamburg, Germany. The platform incorporated other emerging technologies as well, including smart contracts and the Internet of Things. The project was conducted in partnership with five international supply chain stakeholders including the Port of Melbourne, Hong Kong-based logistics company OOCL, and the world’s second-largest almond grower, Olam Orchards. The main area of focus for the platform was the digitization of operations, documentation, and finance processes. The five partners were able to track the humidity, temperature, and other conditions inside the shipment in real time using IoT devices.

Read more

Check Also

ING, Citigroup, Shell And ConsenSys Partner to Create Ethereum-Based Platforms

In spite of a multi-month tumultuous market, institutions continue to clamor for the implementation of innovative systems and solutions that are based on blockchain technologies. 15 Firms Enter A ConsenSys-backed Blockchain Initiative On Wednesday morning, a media embargo on one of the most notable blockchain-related developments of this year was finally dropped. As per a short, but sweet four-page document, entitled “Industry Players and Banks Join Forces to Launch Blockchain Platform to Transform Commodities Trade Finance,” 15 of the “world’s largest institutions,” along with blockchain startup ConsenSys, have joined hands to make a collaborative foray into the enterprise-level blockchain platform space via a new firm called komgo SA. Although many questioned the document’s validity at first, due to a seemingly “dubious website” linked to this venture, Bloomberg, Reuters, and ConsenSys itself have since corroborated this unexpected, yet welcomed development. [email protected] is working with Citi, ING, Shell & more on an #Ethereum #blockchain platform for financing commodities trading. Blockchain is viewed as a solution to trade & settlement inefficiencies and to improving transparency and reducing the risk of fraud https://t.co/sv8KZC7MNX — ConsenSys (@ConsenSys) September 19, 2018 komgo SA, which has already been backed by leading banks, trading companies, and energy firms, intends to digitize the global trade ecosystem via a blockchain-based “open platform.” To facilitate this ambitious move, komgo has been incorporated in Geneva, Switzerland, which has become a leading cryptocurrency and blockchain hub. It is important to note that the 15 firms that have contributed to this startup are: ABN AMRO, BNP Paribas, Citigroup, Crédit Agricole Group, Gunvor, ING, Koch Supply & Trading, Macquarie, Mercuria, MUFG Bank, Natixis, Rabobank, Shell, SGS and Societe Generale, which are all well-respected firms in their own right. Although this lineup of firms is undoubtedly stacked to the brim, as aforementioned, komgo has tapped ConsenSys for its blockchain expertise and its unique insights into leading startups in this industry. Expressing his excitement, Joseph Lubin, a well-known cryptocurrency proponent and the co-founder of Ethereum and ConsenSys, wrote: “We are now entering a new era of simple and inclusive access to blockchain technology to advance stronger, more collaborative, business relationships previously out of reach. We are thrilled to see leading commodity trade finance banks and commodity houses come together to create komgo SA, which will radically simplify and accelerate trustworthiness, auditability, and accessibility to trade financing across the industry.” Many are hopeful that a collaboration between ConsenSys, coupled with the aforementioned startup, will parent ground-breaking new innovations within the next few months and years. As alluded to in the document that broke this news, komgo has already eyed greatness, aiming to launch two products before this year’s end. The first will “standardize and facilitate” KYC processes without the utilization of a centralized database or system, while the second will purportedly be “digital letters of credit,” which will allow legacy platforms to submit digitized trade data to komgo and its bank partners. This news follows PWC Blockchain head Grainne Mcnamara’s comments regarding enterprise-level solutions, in which she noted that firms are finding it difficult to roll out such systems in a manner that is “at-scale” and is cheaper than traditional systems. But if komgo SA proves to be a success, as many hope, her fears about the barriers that blockchain solutions will need to cross will be respectfully cast aside. Featured Image From Shutterstock The post ING, Citigroup, Shell And ConsenSys Partner to Create Ethereum-Based Platforms appeared first on NewsBTC.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Disclaimer: Trading in bitcoins or other digital currencies carries a high level of risk and can result in the total loss of the invested capital. theonlinetech.org does not provide investment advice, but only reflects its own opinion. Please ensure that if you trade or invest in bitcoins or other digital currencies (for example, investing in cloud mining services) you fully understand the risks involved! Please also note that some external links are affiliate links.