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Blockchain bond sees $50m boost
The first bond to be created, transferred and managed through its life cycle using blockchain technology has received a new funding boost.
Blockchain bond sees $50m boost
The first bond to be created, transferred and managed through its life cycle using blockchain technology has received a new funding boost.
In a bid to increase its liquidity of the blockchain bond and broaden market participation, the World Bank has raised an additional $50 million for its kangaroo bond due August 2020.
The announcement came after Commonwealth Bank of Australia (CBA) and the World Bank, with TD Securities (TD) acting as a market maker, added additional capability to the platform by enabling secondary bond trading recorded on blockchain, making this “the first bond whose issuance and trading are recorded using distributed ledger technology”, it’s been reported.
According to a statement, the successful tap expands market participation for the product, with the Bond-i platform combining three joint lead managers, CBA, RBC Capital Markets (RBC) and TD.
It also brings together new market participants, including an offshore investor, and the existing investor community, including ongoing support and input from TCorp, the NSW Treasury Corporation.
The new issuance “builds on the success of the platform”, taking the total capital raised for the blockchain project to $160 million, after an initial $110 million raise by the World Bank and CBA, derived from two-year bonds back in 2018.
It will reportedly further enable capital markets to leverage distributed ledger technologies for faster, more efficient and more secure transactions.
Commenting on the fundraising efforts, World Bank’s head of funding, Andrea Dore, said, “We are happy to see the continued, strong support and collaboration from investors and partners.”
“The World Bank’s innovation and experience in the capital markets is key to working with our member countries to increase digitisation to boost productivity in their economies and accelerate progress towards the Sustainable Development Goals,” she continued.
According to Sophie Gilder, the head of blockchain and AI at CBA, the bank “now has tangible evidence from our first bond offering using blockchain technology and subsequent bond management, secondary trading and tap issue via the same platform, that blockchain technology can deliver a new level of efficiency, transparency and risk management capability versus the existing market infrastructure”.
She said the bank’s next intention will be to deliver “additional functionality to deliver greater efficiencies in settlement, custody and regulatory compliance”.
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