The World Bank has released bond-i (blockchain operated new debt instrument) with funds raised to the tune of $110 million Australian Dollars – around $81 million USD. The original target had been some $8 million USD lower, which marks an extremely successful run of fundraising, but is also proof of support from investors, of this world first. The bond, which will run for two years, will be entirely blockchain-based, from creation to management.
The bond arranger is the Commonwealth Bank of Australia (CBA) and it will run for two years. This comes a year after the World Bank launched Blockchain Innovation Lab, which is aimed at understand[ing] the impact of blockchain and other disruptive technologies in areas such as land administration, supply chain management, health, education, cross-border payments, and carbon market trading.
The treasurer of the World Bank, Arunma Oteh, was quoted in the official press release as saying:
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, fund managers, government institutions, and banks. We were no doubt successful in moving from concept to reality because these high-quality investors understood the value of leveraging technology for innovation in capital markets.
Our painstaking work, over the last year, and in partnership with Commonwealth Bank of Australia, was equally instrumental to the success of the transaction. Commendation also to our other service providers, King & Wood Mallesons, IHS Markit, Microsoft and Toronto Dominion Securities.
We welcome the huge interest that this transaction has generated from various stakeholders and will continue to seek ways to leverage emerging technologies to make capital markets more secure and efficient.
The CBA developed the bond-i blockchain within their own centre – the Blockchain Centre of Excellence, which is housed in the Sydney Innovation Lab. The bond will expire on August 28th 2020.
For more information on yields, take a look at the press release by clicking here