The major bank announced in a statement that its new bond ‘bond-i’, based entirely on distributed ledger technology, received a mandate on 10 August from the World Bank, an international financial institution that makes loans to developing countries.
Since the two-week consultation period, the blockchain-based bond has raised $110 million for the World Bank from investors including First State Super, NSW Treasury Corporation, Northern Trust, Treasury Corporation of Victoria, QBE and SAFA as well as CBA itself.
These investors also provided feedback on platform structure and functionality.
‘bond-i’, which is both an acronym for Blockchain Operated New Debt Instrument, as well as a reference to Bondi Beach, is part of the World Bank’s strategy to utilise new technologies for development, according to the statement.
In 2017, the World Bank established its Blockchain Innovation Lab in order to explore the application of distributed ledger technology in relation to areas such as payments, supply chain management, carbon market trading, health and education.
The blockchain platform for bond-i was developed in the CBA Innovation Centre’s Blockchain Centre of Excellence.
CBA executive general manager, IB&M International James Wall described the interest in the bond as “overwhelming”.
“It is clear the market is ready and open to the uptake of emerging technologies and sees the potential evolution of the capital markets,” Mr Wall said in the statement.
“It has been a pleasure to work on such a groundbreaking transaction with a forward-thinking organisation like the World Bank.”
World Bank Treasurer Arunma Oteh expressed his delight at the bond being 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.”
The World Bank would be seeking further ways to leverage developing technologies “to make capital markets more secure and efficient,” Mr Oteh added.