The CBA Blockchain Centre of Excellence, housed in the Sydney Innovation Lab, has developed the blockchain bond platform.
The blockchain operated new debt instrument is claimed to be the first bond to be created, allocated, transferred and managed via its life cycle using distributed ledger technology.
The bank has raised A$110m ($80.5m) through two-year blockchainbond, securing support from investors for its development activities via transaction that is fully managed using the blockchain technology.
The World Bank has selected Commonwealth Bank of Australia (CBA) as arranger for the bond, after two-week consultation period with the marker and major investors.
Investors in the bond comprised of CBA, First State Super, NSW Treasury Corporation, Northern Trust, QBE, SAFA, and Treasury Corporation of Victoria.
CBA and the World Bank will continue to protect investor interest in the bond across its life cycle, and also addresses inquiries from other market participants in relation to the platform.
In June 2017, the World Bank opened a blockchain innovation lab to study the impact of blockchain and other disruptive technologies in different areas, including land administration, supply chain management, health, education, cross-border payments, and carbon market trading
World Bank treasurer Arunma Oteh said: “I am delighted that this pioneer bond transaction using the distributed ledger technology, bond-i, was extremely well received by investors. We are particularly impressed with the breath of interest from official institutions, fund managers, 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 foundation investors provided their feedback on the platform structure and functionality.
The bond’s platform service providers comprised of TD Securities as market maker, IHS Markit as independent valuation provider, Microsoft as independent code reviewer, and King & Wood Mallesons as deal counsel.
CBA IB&M International executive general manager James Wall said: “It is clear the market is ready and open to the uptake of emerging technologies and sees the potential evolution of the capital markets. It has been a pleasure to work on such a ground-breaking transaction with a forward-thinking organization like the World Bank.”
