is a two-year bond that has raised $79 million ($110 million Australian
dollars). Investors include the Commonwealth Bank of Australia (CBA), First
State Super, New South Wales Treasury Corporation, Northern Trust, QBE, SAFA
and the Treasury Corporation of Victoria.
those partner organizations is a major bank, insurer or other finance company
based in Australia. And indeed, the platform that the World Bank is using to
issue bond-i was developed in the CBA’s Blockchain Centre of Excellence
in Sydney. So, although the World Bank’s ambitions for using financial services
to end poverty are global in nature, the money and technology behind this
particular project is centered firmly in Australia.
the organizations listed above that served as investors, Microsoft also
contributed to the bond-i platform as an “independent code reviewer,”
according to the World Bank. Other companies provided financial and legal
services related to the bond.
The bank noted
that the bond is part of a larger effort “to harness the potential of
disruptive technologies for development.” The announcement follows the launch
by the bank in June 2017 of the Blockchain Innovation Lab, whose mission includes not
just blockchain-based innovations related to finance but also ways to improve
governance using a blockchain.
Bond? Maybe Not
It may be
something of a stretch to call bond-i the world’s “first” blockchain-based
bond. The design for blockchain-based bonds was patented as far back as 2012. Daimler issued a 100 million euro bond in 2017 using a permissioned
blockchain based on Ethereum. A Japanese company issued a small-scale bond
in the same year. So, this is not a hands-down, first-of-its-kind move.
fairness, though, the World Bank is not calling bond-i the very first
blockchain-based bond. It is saying that it’s the first “global blockchain
measures, bond-i is indeed the first bond issued by a financial institution
with global reach — even if, as noted above, the financing for this bond is
based pretty squarely in Australia.
might also point out that bond-i is being powered by a private,
permissioned blockchain running on centralized infrastructure. That approach
makes the news less exciting for blockchain enthusiasts than a major bond
issued on a public, fully decentralized blockchain would.
a time when the hype around blockchain technology’s ability to transform global
finance over the long term seems to be waning, any move by a financial
organization as prominent as the World Bank to entrust a mainstream financial
service to a blockchain is a big deal. Although the World Bank and its
investors may not yet be ready to leave the cozy environs of a permissioned
blockchain, they’re taking an important step toward decentralizing finance.