The CommBank or the Commonwealth Bank of Australia and the World Bank started working together to enable recording of secondary market bond trading with using and benefiting of blockchain technology.
The World Bank and CommBank collaboration
The announcement about the partnership came on the 15th of May. Both institutions announced that their successful recording of a secondary transaction for bond-i, which is a debt instrument operated by a blockchain, on a distributed ledger, shows the “vast potential” of the blockchain technology, with the first bond to have trading and issuance recorded on a blockchain platform.
Bond-i has been issued for the first time in August of last year by the World Bank, while the CommBank was a sole arranger. The experiment actually helped the World Bank to raise $81 million at the time.
According to the vice president and treasurer at the World Bank, enabling secondary trading recorded on the blockchain will be a huge step forward towards the enabling of capital markets to leverage distributed ledger technologies for much faster, as well as more efficient and secure transactions.
The Blockchain Centre of Excellence helped to build and develop the platform
The Blockchain Centre of Excellence of CommBank helped to build and develop the blockchain platform on top of the Ethereum or ETH network. Moreover, Microsoft helped in reviewing it, regarding its security, resilience, and architecture.
The head of commercialization and experimentation of CommBank Innovation Labs, named Sophie Gilder, said that blockchain definitely has the needed potential to streamline the processes for raising capital, as well as trading securities, and improve operational efficiencies, or even enhance regulatory oversight.
Other institutions testing the systems
CommBank has disclosed its intention to issue a bond over the blockchain system somewhere during 2017, without even declaring the name of the issuer at that time.
Another thing that is worth mentioning in this context is that other financial institutions around the world were recently testing the systems for bond issuance based on blockchain. Such institutions include Santander, Abu Dhabi-headquartered Al Hilal Bank, and Societe Generale.