World Bank breaks ground by selling blockchain bonds


The World Bank uses blockchain technology for the first time to sell a bond, in the sign that technology, whose lawyers say it has the potential to destroy capital markets, is arousing greater interest. [19659005] The Washington-based lender has instructed the Commonwealth Bank of Australia to organize the sale of the bond, which will be known as Bondi, or Blockchain Offer New Debt Instrument. It is also a nod to the famous Bondi Beach in the hometown of CBA, Sydney.

"We believe that emerging technologies also offer transformative but conservative opportunities to continue innovating, respond to investor needs and strengthen markets," said Arunma Oteh, Treasurer of the World Bank.

The investor's interest in the loan was "strong", said the World Bank, which aims to raise about $ 100 million from the sale later this month.

The merits of the new technology include the ability to reduce the time needed to pay off these securities from five days to a few seconds. But at the same time, the potential for full transparency and a reduction in taxes that should eventually become part of the attraction of this generalized register technology still need to be realized.

Blockchain technology is expected by its supporters to eventually lift the institutions that provided the traditional capital market infrastructure, including depository institutions, clearing entities, custodians and other intermediaries. But it will take some years to involve regulatory and legal changes.

"We expect to see other issuers on the market soon," said Paul Snaith, head of the World Bank's assets and liabilities operations. "Some central banks are already considering how to use the blockchain for settlement transactions."

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