We know that The World Bank is one of the most respected global institutions that sometimes uses its position to support new markets and securities, and they are doing just that in the worlds first blockchain bond. This bond, with the sole lead manager being the Commonwealth Bank of Australia, and a group of 7 investors, issued A$110 million or $80 million US, was of course for the World Bank. This groundbreaking step could upgrade the process of issuing bonds – the current system have been in place for over 40 years and has not changed much. This new technology is changing how bonds are issued. According to sources in interest in this issue beat expectations.
Participants were three Australian state governments, local pension funds and a US financial firm, and others. Comments from those who participated were excited that distributed ledge technology or DLT was being used for a common practice, bond issuance. The World Bank carries a AAA rating, and note that the variation of investor was wide – so both private and governmental institutions have clearly supported this pioneering effort. Some bond experts feel that applying blockchain technology to this multi-trillion dollar global market will make the process of issuance faster, safer and more reliable.
The World Bank issues between $50 billion and $60 billion a year in bonds with a goal to support economic progress in developing countries. In the coming months we will be updating you on other deals that, historically have used traditional means of issuance, but are now applying said blockchain technology. More on this topic in the coming weeks, and months.
This story was reported on Reuters, CNBC and other news services over the past 24 hours.