The bank claims that this is the first bond which has been created, allocated, transferred and managed through its life cycle using distributed ledger technology (DLT).
The World Bank announced on Aug. 16 that it raised an additional A$50 million (over $33 million) for its Kangaroo bond due August 2020, using a blockchain.
Per the report, the initiative expands the World Bank’s Bond-i blockchain platform combining three joint lead managers, Commonwealth Bank of Australia (CBA), RBC Capital Markets and TD Securities (TD).
The initiative has seen the participation of new market participants, including an offshore investor and the existing investor community including ongoing support and input from TCorp.
Major banks join World Bank’s Bond-i blockchain platform
CBA was mandated by the World Bank as an arranger for the bond in August last year, which resulted in the raising of AUD$110 million (over $74 million). In May, CBA and the World Bank enabled on-chain secondary bond trading with TD acting as a market maker.
The latter development reportedly made this the first bond whose issuance and trading are recorded using DLT. James Wall, Executive General Manager International at CBA commented on the development:
“The tap is an important milestone in demonstrating the full lifecycle management of an issuer’s capital markets needs. It is also a significant step for the platform bringing on additional participants and demonstrating the broader potential of Bond-i as a capital markets platform.”
The bond platform employed reportedly allows for faster, more efficient and more secure transactions. It is part of a broader initiative aiming for applying DLT by the World Bank.
As Cointelegraph reported in April, at the time the International Monetary Fund and the World Bank jointly launched a private blockchain and a so-dubbed quasi-cryptocurrency.
World Economic Forum Looks to Blockchain for Supply Chain Woes
That’s because many end-chain companies only knew their sourced parts’ immediate history, the authors wrote. “They usually have little to no knowledge of suppliers further up the chain”, and, therefore little to no way of knowing if those unknowns are vulnerable to disruption.
Fan and Liao wrote that blockchain would add such transparency without sacrificing corporate privacy. A properly built blockchain system would give broader access to relevant parties and also allow them to purchase supply chain data from their up-stream suppliers.
“Blockchain is the ideal technology to ensure that data on performance and risk, which underpin all supply chain finance transactions, can be shared in an authenticated manner with financiers and other parties to a transaction, even when there is no direct relationship between them”, the authors wrote.
Record digitization is Fan and Liao’s other partial solution to this crisis. For one, digitized supply chain records are far more accessible than paper copies, which, in this age of shuttered offices and stay-at-home orders, may well be out of reach.
Digital-first companies and governments “are dealing with the supply chain disruptions much better than those without”, they wrote.