CBA has been selected as sole arranger for the first bond to be created, allocated, transferred and managed using blockchain technology.
The new blockchain-based bond has been developed with support and input from investor community including Northern Trust, QBE and Treasury Corporation of Victoria.
After the launch, the bond will be issued and distributed on a blockchain platform operated by the World Bank and CBA in Washington and Sydney, respectively.
CBA institutional banking & markets international executive general manager James Wall stated that the bank has collaborated with financial institutions, government bodies and corporates to innovate through blockchain.
The collaboration with World Bank will demonstrate how blockchain technology can act as a facilitating platform for different participants.
As part of its mandate to reduce poverty and promote development, the World Bank issues $50- $60bn annually in bonds for sustainable development.
The bank is focusing on helping countries transition to sustainable economies that are technology-driven, while exploring benefits of disruptive technologies such as blockchain, across all its operations to speed up progress of its Sustainable Development Goals.
World Bank treasurer Arunma Oteh said: “Since our first bond transaction in 1947, innovation has been an important hallmark of our success with leveraging capital markets for development. Given the transformative role of emerging technologies, we continue to prudently seek opportunities for us to meet investor needs as well as the needs of our clients.
“I am therefore delighted that after a year of working with Commonwealth Bank of Australia, we are in a position to launch our first blockchain bond transaction. Microsoft’s experience and support have also been instrumental to achieving this historic milestone.”
Since 2009, CBA has acted as a lead manager for several of World Bank’s bond issuances in Australian and New Zealand capital markets.
CBA’s blockchain center of Excellence at Sydney Innovation Labs, has taken a lead role in applying blockchain technology to capital markets.
Last year, it has partnered with Queensland Treasury to test a prototype bond on blockchain in the first blockchain bond issuance by a government entity.
