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International financial institution, World bank, issues bonds to back development in developing countries with emerging economy. These bonds are amount close to $50 billion-$60 billion annually. Now, starting this year the World Bank is taking a bold step by creating first bond globally to be created, allocated, transferred and managed using a blockchain technology.

The World Bank has hired Commonwealth Bank of Australia (CBA), one of Australia’s biggest banks, to arrange a pioneering bond issue to be created and run using only blockchain, aiming to make capital raising and trading more efficient by reducing the number of necessary intermediaries.

Named after Australia’s iconic beach, “bond-i” will be a milestone in World Bank’s efforts to learn how the bank can advise its client countries on the opportunities and risk that disruptive technologies offer, said World Bank chief information officer Denis Robitaille, in a statement.

The bond-i blockchain platform was built and developed by the CBA Blockchain Centre of Excellence.

With this, World Bank aims to raise about Aus$50 million $36 million, although it could be double that if more investors get involved before the bond is finalized the week of Aug. 20.

“Since our first bond transaction in 1947, innovation and investor satisfaction have been important hallmarks of our success with leveraging capital markets for development,” World Bank Treasurer Arunma Oteh said.

Also Read – Blockchain Will Turn The Internet Into World’s Largest ‘Stock’ Market, Says An Early Crypto Investor

Notably, the blockchain technology used for bond-i bonds will not at all be like one used in Bitcoin, where here anyone can engage in mining, the process of verifying new transactions. Instead, the World Bank is said to be using a private version of Ethereum in which validators must have permission. Ethereum is a decentralized platform for applications. It is powered by Ether – a cryptocurrency, which is in turn powered by the Blockchain technology.

Microsoft’s Azure cloud platform will power the computing infrastructure required for transaction of ‘bond-i’.

The transaction is the brainchild of the World Bank’s innovation lab, which has been working on the issue for nearly a year, together with the Commonwealth Bank of Australia.

In June last year, World Bank has launched a blockchain lab, as part of a bid to pilot projects that can improve governance and social outcomes in the developing world. The blockchain lab is now seeking to bring together internal and external participants to work on blockchain use cases of significance to the bank’s more than 80 client countries.

The Blockchain Lab serves as a learning, experimentation, and collaboration platform on DLT (Distributed Ledger Technologies) and Blockchain inside and outside the World Bank Group (WBG). Th Blockchain Lab engages and partners with leading technology companies, start-ups, entrepreneurs, innovators and development organizations to experiment, develop, and roll out blockchain-enabled solutions. The Blockchain Lab conducts knowledge-sharing events open to anyone interested in topics related to blockchain and development.

The Lab intends to boost and contribute to increased WBG knowledge and expertise in DLT and Blockchain, and improve its capability to respond to client countries inquiries and needs.

To recall, in April this year, Consensys, which is founded by Ethereum co-founder Joseph Lubin, has signed an agreement with NITI Aayog, a govt. of India’s policy think, to build a strong Ethereum blockchain-developer community in India. The company entered India a while back and opened an office in Delhi.

Via – WorldBank.org | References – MIT Technology Review, CoinDesk

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