The World Bank is getting ready for the first-ever blockchain-bond in the entire world. The cross-border financial entity has already given the authority to the Commonwealth Bank of Australia to settle the novel securities.
This will be the first bond in the financial work, created, appropriated, transferred and run on the base of DLT.
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The new securities have been labeled ‘bond-I’. This is an acronym where:
- ‘b’ stands for ‘blockchain’,
- ‘o’ – for ‘offered’,
- ‘n’ – for ‘new’,
- ‘d’ – for ‘debt’,
- and ‘i’ – for ‘instrument’.
As CNBC reports, there’s also an allusion to Bondi Beach, a white-sand crescent, an iconic recreational zone in Sydney. Moreover, the new securities have also got a name the ‘kangaroo bond’, which is used to refer to all foreign bonds issued in Australia in local currency.
According to the World Bank, investors are extremely interested in the blockchain-bond. On par with CBA, the entity plans to set off the transaction once they have discussions with more investors.
Why Blockchain?
One of the reasons why blockchain has been used for financial purposes is that DLT is a secured means for transactions registration on the chain. It is not possible to make any alterations into the record once it’s completed.
The joined released of both the World Bank and the CBA stated that DLT can deal with inswept processes among many debt capital market agents. As per the World Bank, blockchain also can:
- streamline such processes as fundraising and securities trading;
- perfect operational effectiveness;
- reinforce regulatory surveillance.
It is expected that after the launch the novel securities will be emitted and disseminated on a DLT platform. Both organizations will operate the latter.
The bond-blockchain is the Ethereum one as it has all the properties needed. However, later CBA might substitute it with further technological advancements in DLT if there are such.
