The World Bank, in collaboration with Commonwealth Bank of Australia (CBA), RBC Capital Markets (RBC), and TD Securities (TD), has successfully raised an additional AUD 50 million in the second tranche of its Kangaroo bond, known as Bond-i.
This marks a significant milestone in utilizing distributed ledger (blockchain) technology for bond creation, allocation, transfer, and management throughout its life cycle.
Expansion of Bond-i Platform
Following the successful issuance of a two-year bond worth AUD 110 million in August 2018, the World Bank’s Bond-i platform has expanded with the addition of a second tranche. The platform, managed by CBA, RBC, and TD, aims to enhance liquidity and broaden market participation in blockchain-based bond transactions.
Joint Lead Managers and Market Participants
The Bond-i platform enlisted three joint lead managers—CBA, RBC, and TD—to facilitate the issuance of the additional AUD 50 million. The initiative attracted new market participants, including an offshore investor, alongside continued support from existing investors, including TCorp (NSW Treasury Corporation).
Blockchain Technology in Capital Markets
Bond-i utilizes distributed ledger technology, specifically blockchain, for the issuance and trading of bonds. This marks a pioneering effort to leverage blockchain for faster, more efficient, and secure transactions in the capital markets.
The success of Bond-i’s platform showcases the potential for blockchain to streamline capital-raising processes and enhance operational efficiencies.
World Bank’s Strategic Focus on Disruptive Technologies
The Bond-i initiative aligns with the World Bank’s broader strategic focus on harnessing disruptive technologies for development.
The World Bank’s blockchain innovation lab, established in 2017, explores opportunities to integrate blockchain and other disruptive technologies in various sectors, including land administration, supply chain management, health, education, cross-border payments, and carbon market trading.
Quotes from Stakeholders
Andrea Dore, World Bank Head of Funding, expressed satisfaction with the strong support and collaboration from investors and partners, highlighting the World Bank’s commitment to digitization for economic productivity and progress toward Sustainable Development Goals.
James Wall, Executive General Manager International at CBA, emphasized Bond-i’s potential as a capital markets platform and its ability to demonstrate full lifecycle management of an issuer’s capital market needs.
Sophie Gilder, Head of Blockchain & AI at CBA, highlighted the efficiency, transparency, and risk management capabilities demonstrated by Bond-i’s use of blockchain technology, emphasizing the bank’s commitment to further enhancements in settlement, custody, and regulatory compliance.
Conclusion
The successful raising of an additional AUD 50 million in the second tranche of Bond-i reaffirms the World Bank’s commitment to blockchain technology’s transformative potential in capital markets. This initiative, led by CBA, RBC, and TD, reflects the continuous evolution of Bond-i as a platform and sets the stage for further innovations in blockchain-based financial transactions.
As blockchain continues to gain traction in traditional finance, Bond-i stands as a trailblazer, showcasing the viability of distributed ledger technology in the bond issuance and trading processes.
