World Bank and Australia's Largest Bank Issue Bond Exclusively Through Blockchain

The World Bank and the Commonwealth Bank of Australia, the country's largest bank, have issued a public bond exclusively through blockchain technology, Reuters reports August 23.

The World's Bank official mandate for the project was first unveiled August 10.

The A$100 million deal entails two-year bonds that will settle August 28 and have been been priced to yield a 2.251 percent return, according a CBA statement.

The prototype - dubbed "Bondi" - is being hailed by the participants as a milestone in automating decades-old bond issuance and sales practices.

"You're collapsing a traditional bond issuance from a manual bookbuild process and allocation process, an extended settlement then a registrar and a custodian, into something that could happen online instantaneously."

As Reuters notes, Word Bank bonds are classified with an AAA rating - the highest possible rating that indicates a high level of creditworthiness.

The bank reportedly issues between $50 and $60 billion in bonds annually to foster economic progress in the developing world.

As Cointelegraph has reported, this May, Sberbank CIB - the corporate and investment banking arm of Russia's largest bank Sberbank - conducted the first blockchain-based commercial bond transaction in Russia.

The transaction was completed in partnership with leading local telecoms firm MTS and the National Settlement Depository, and entailed the smart-contract enabled issuance of MTS corporate bonds for the value of RUB 750 billion with 6-month maturity.

As of December last year, the Australian Securities Exchange has been working to implement blockchain technology to replace its current system for processing equity transactions, a project that Reuters today notes is slated to be completed by 2020.