On Thursday, CBA confirmed to Reuters that the bond worth $100 million AUD ($73 million USD) will be transacted via blockchain on August 28. Other partners that took part in the initiative include Northern Trust, the Treasury Corporation of Victoria, QBE, and legal company King & Wood Mallesons, which advised on the legal framework for the project.
The World Bank says it is the first bond globally "to be created, allocated, transferred and managed using blockchain technology".
The bond-i blockchain platform was built and developed by the CommBank Blockchain Centre of Excellence, housed in the Sydney Innovation Lab. "We were no doubt successful in moving from concept to reality because these high-quality investors understood the value of leveraging technology for innovation in capital markets".
Regardless of who issues the first bond on the blockchain, the World Bank's participation is a huge positive validation for FIC Network vision and are motivated to work harder than ever before to deliver. Wall also said that the World Bank plus the retinue of investors were keen on seeing how well blockchain technology could improve the bond sales process.
While there have been other prototypes or parallel simulation blockchain projects in the market before, CBA said the World Bank bond will be the first time that capital is raised from public investors through a legally valid bond issuance that uses blockchain from start to finish.
Interestingly the World Bank press release did not mention a launch date and it is not clear just how close they are to an issue.
Lately, cryptocurrencies and blockchain technologies have been in the news for mostly negative reasons.
Earlier this year, Russian bank Sberbank and telecoms company MTS conducted the country's first commercial bond transaction on the blockchain platform.
And, if all goes well, World Bank can definitely make use of the new process - the global lender annually issues over $50 billion in bonds to cater to sustainable economic growth across the globe.
Microsoft Corp was an independent code reviewer for the bond offering, while TD Securities served as market maker. As a frequent issuer in the Australian dollar market, it has since 1986 raised almost A$60 billion from investors globally.