Seven large investors such as the Commonwealth Bank of Australia supported the world’s first public bond which was created and managed using blockchain only. James Wall, the Commonwealth Bank’s general manager, said that the response has been “overwhelming” and confirmed that their support had helped the blockchain fund raise A$110 million for the world bank. Initially aimed at improving the decades old bond sales practices, the introduction of blockchain exceeded all expectations as it moved the sale away from a manual process into cheaper automation.
Among other investors were the American fund Northern Trust, three Australian state governments, local pension fund First State Super. World Bank Treasurer Arunma Oteh also confirmed the “huge” interest among investors, and he expressed his pleasure of the world bank pioneering the first bond transaction using the distributed ledger technology.
It is particularly interesting to note that the blockchain sale drew interest from high quality institutional investors who seemed to have recognized the potential of leveraging technology to bring innovation into capital markets.
Like many other institutions, the World Bank which carries an AAA rating also uses its borrowing power to secure financing in the bond markets. On average between $50 billion and $60 billion a year of bonds are issued in order to help progress economic development in developing countries.
Both the popularity of the Australian dollar as one of the most traded currencies in the world and Australia’s well established financial infrastructure have made it a popular testing site for new market developments. The World Bank’s bond issuance using blockchain technology from the beginning of the process to the end — is the first of its kind.
