Last year the World Bank and the Commonwealth Bank of Australia announced a permissioned Ethereum-based blockchain to facilitate the end-to-end issuance of bonds between financial partners. The Bretton Woods-created financial institution hopes to make debt capital markets far more efficient with a bank-to-bank blockchain network. At the same time, the World Bank’s bond scheme has been scrutinized for corporate and political collusion with global leaders and Fortune 500 multinational corporations.
The World Bank’s Plans to Sell Debt via Blockchain
The World Bank wants to digitize bond markets and debt capital settlement on a private Ethereum blockchain. The project is led by three other large financial institutions including the Commonwealth Bank of Australia (CBA), RBC Capital Markets (RBC) and TD Securities (TD). According to the World Bank and CBA’s blog post, the project had gathered $81 Million for the issuance of distributed ledger-based bonds in August 2018. This year, on August 16, the World Bank revealed the project’s partners increased the liquidity of the blockchain bond by more than $33 million. Essentially the bank uses the private blockchain to issue a digitized instrument of indebtedness called the Bond-i, an autonomous smart contract token system that pays coupon payments over a length of time. The technicalities of the blockchain platform were developed by CBA’s Innovation Lab’s Blockchain Centre and the bank has revealed that the “blockchain platform’s architecture, security, and resilience was conducted by Microsoft.” Additionally, on the legal side of things, the project is supported by the litigation firm King & Wood Mallesons.
The World Bank was established in 1944 and is deeply rooted in Keynesian economics. Over the last year, » Read Full Article «