On Wednesday, 15 March 2019, the World Bank and the Commonwealth Bank of Australia, commonly known as CommBank, announced that they have successfully completed the first-ever Blockchain bond transaction.
According to both institutions, this successful completion of a secondary transaction on a distributed ledger has marked a milestone on the path of introducing Blockchain technology to traditional financing and investment.
The bond, called Bond I, was first introduced in August 2018 and aims to jump-start a revolution in traditional bond-issuing practices.
In a press release, Jingdong Hua, World Bank Vice President and Treasurer commented that:
Enabling secondary trading recorded on the blockchain is a tremendous step forward towards enabling capital markets to leverage distributed ledger technologies for faster, more efficient, and more secure transactions.
To be able to fully facilitate this transaction, CommBank and its’ Blockchain Centre of Excellence developed a blockchain-based platform on the Ethereum network, which was later quality-tested by Microsoft architecture specialists.
CommBank has been steadily involved in following the developments offered by blockchain technology and started announcing plans to create this type of bond as far back as 2017.
Innovative banking decisions like this, especially involving the World Bank, bring hope for the official introduction of Blockchain into the financing world, and not simply for trading cryptocurrency, but for the overall improvement of the outdated financial system.
As CommBank and the World Bank delve deep into blockchain more and more banking institutions decide to take a step towards innovation. One of the more prominent examples is Societe Generale, which announced that a first blockchain bond was issued by the bank in April 2019.