Even the World Bank is not immune to the hype of blockchain, as it has instructed the issuance of the first-ever bond through blockchain. The Commonwealth Bank of Australia will be issuing what is referred to as “the Kangaroo bond.” Businesses usually use ‘bonds’ to raise funds – when people invest in it, they’re loaning money directly to the business.
Over time, the debt is repaid – usually with a lot of extra dividends. To make it unique and different from the conventional concept, banks have decided to call theirs ‘bond-I’ – an acronym that simply means “blockchain operated new debt instrument.”
According to a joint press release, blockchain has the capacity to restructure and simplify the processes among several debt capital market agents and intermediaries. This can help improve regulatory oversight, enhance operational efficiencies, and streamline trading securities and raising capital.
The Bond Will Be Issued on the Blockchain of Ethereum
The bonds will be allocated, created, managed, and transferred via a private blockchain that is based on Ethereum (ETH). The platform will be handled via the Azure cloud computing system of Microsoft by way of a data center in Washington DC.
Leveraging solutions such as data centers and Azure indicates that the present implementation of bond-I perhaps isn’t solely decentralized. While the Commonwealth Bank of Australia (CBA) says there is a very strong interest in the bonds, there is actually no way to tell if this is true.
There is an irony in the World Bank instructing debt be managed through blockchain. Also, just about a week ago, CBA said they had adopted the use of distributed ledger to ship a lot of almonds to Germany.
Ethereum (ETH) Price Today – ETH / USD
At the time of writing, Ethereum (ETH) is trading at $316 after a decrease of about 12 percent over the past twenty-four hours. The current market cap of the digital currency is $32.03 billion and its trading volume over the past twenty-four hours is $1.70 billion.