The World Bank and the Commonwealth Bank of Australia (CommBank) are combining efforts to see that bond trading on blockchain becomes a reality sooner than later.
The two banks made this known on Wednesday after they successfully did a test transaction for bond-i. Bond-I is the upcoming debt instrument which will soon be usable on blockchain. The chances that this will work out are high and people are already expectant.
The first time most people got to know about Bond-I was 9 months ago when the World Bank and Commbank issued it. By that singular act, the World Bank was able to raise $81 million at once. The Vice President of World Bank, Jingdong Hua said:
“Enabling secondary trading recorded on the blockchain is a tremendous step forward towards enabling capital markets to leverage distributed ledger technologies for faster, more efficient, and more secure transactions.”
Commbank’s role was to create a blockchain platform. They used the ethereum network to achieve this and the work was evaluated by Microsoft. Key areas that were tested include its architecture, resilience and security.
According to Sophie Gilder who is head of experimentation and commercialization at CommBank Innovation Labs:
“Blockchain has the potential to streamline processes for raising capital and trading securities, improve operational efficiencies, and enhance regulatory oversight.”
CommBank first started this move since 2017. At that time, they were not really specific on what they were trying to do. Other institutions that have been trying to do a similar thing are Abu Dhabi, Santander and Societe Generale.