Australia has maintained itself at a leading position for Blockchain and its exploration, supported by its Government for various applications. Now the Commonwealth Bank of Australia (CBA) is preparing to create world’s first Blockchain based bonds.
CBA, one of the biggest banks in Australia, mentioned in a press release that they will use a blockchain platform to issue, transfer and manage these bonds.
Arunma Oteh, Treasurer of World Bank, mentioned in an interview that the launch was prepared post its development for a year with CBA.
Blockchain Based Commercial Bonds
Northern Trust, QBE Insurance, Treasury Corporation of Victoria and other blockchain based commercial bond investors already approved to issue debt for the bond named “Bond-I”, Blockchain Offered New Debt Instrument.
In light of the CBA, which developed the platform in-house, the platform utilizes a private Ethereum network for recording transactions. The platform has been reviewed by the technology giant Microsoft for its architecture, resistance, and security.
With the home grown technology, CBA aims to involve investors for a bond issue process in a distributed network. Consequently, the efficiency to negotiate and increase capital for the bond will increase.
The CBA’s push towards blockchain based solution has its origin from the Australian Securities Exchange looking forward towards distributed ledger. The Australian Securities Exchange plans to settle equity trades using blockchain from 2020 to reduce operational cost.
In order to reduce poverty and improve the sustainability of global markets, the World Bank spends $50-60 billion annually.
Denis Robitaille, CIO at the World Bank, commented in the release:
“This pioneering bond is a milestone in our efforts to learn how we can advise our client countries on the opportunities and risk that disruptive technologies offer as we strive to achieve the Sustainable Development Goals.“
– Source: coindesk.com
This is great news for blockchain and cryptocurrency enthusiasts because this is the first time a government organization plans to use blockchain in a financial landscape. In addition, this opens the door for institutions worldwide to accept the platform. These institutional investors are already waiting for just one go-ahead in the form of regulation. Once Bondi gets its share of the pie, a lot of these institutional investors will jump in to drive benefits out of such blockchain based solutions.
Effect on adaptation of blockchain
With the upbring of Bond-i, we might see many more of such solutions coming up throughout the world. The introduction of Bond-i might prove pivotal in the development and adaptation of blockchain worldwide. Especially in the banking ecosystem, as because of the basic nature of the technology itself, it entails enormous capabilities to disrupt the way banking works today.
Backed by World Bank, Bond-i might provide additional support required toward large scale implementation of such solutions. This will not only reduce the operational costs but also bring in a built in level of transparency as well. As a result,we can expect a stable blockchain based ecosystem enabling real time transactions.
This initiative will prove as a milestone for Blockchain in the financial domain. It will also motivate other industries to open doors for Blockchain for its wide adoption. We expect the disruptive technology to spread leaps and bounds and deliver infinite value across industries in the near future.
So, How do you think it will affect the blockchain technology in its adaptation worldwide in the coming years?
Tell us what you think about it in the comments section below.