Commonwealth Bank of Australia Given Rights for First Blockchain based Bond

August 10, 2018

3 min read

The Commonwealth Bank of Australia (CBA) has been given the mandate to issue bonds exclusively through Blockchain technology according to a release. The official release stated that CBA would have the rights to create, allocate, transfer and manage the world’s first bond through Blockchain.

The $AUD Kangaroo bond termed as ‘bond-i’ – Blockchain Offered New Debt Instrument will be managed by the World Bank in Washington, USA and CBA in based in Sydney, Australia. It will be on the Ethereum blockchain due to Ethereum’s large and active community globally.

CBA in the release, however, has mentioned its ‘openness’ to other blockchain platforms in the near future depending on which blockchain platform they find best. Microsoft was responsible for a complete review of the security of the blockchain while King and Wood Mallesons are the legal advisors.

Sophie Gilder, Head of Blockchain, Innovation Labs, CBA spoke about the importance of blockchain technology, “We know blockchain has the potential to revolutionise financial services and markets, and this transaction is a significant step towards that future state. By working collaboratively with the World Bank, we were able to find solutions to technical and legal considerations to make this groundbreaking transaction a reality. This project further solidifies CBA’s position at the forefront of blockchain technology and we are excited to build on this, in partnership with our clients.”

CBA has plans of spending more than $1 billion on technology such as Blockchain, and this has been utilised in some amazing feats so far. A few weeks ago CBA was part of an export of almonds from Australia to Germany, using blockchain for tracking, documentation and payments.

A Reddit reply by the username of ‘cant_play_kazoo’ suggested that privately funded platforms might be the future.

‘I suppose that’s right. It’s the smart move, on their part.

What are the odds that such technology will soon become disproportionately influenced and steered by such large organisations or even entire states?

They’re already suggesting being ‘open’ to moving away from Ethereum in the future, is it likely that soon privately (not crowd or public ICO) funded platforms will begin to rise and dominate?’

While another Twitter user by the name of ‘Digital Scotland ‘commented on the World Bank Treasury’s tweet about the Blockchain bond and asked if poor communities could use these bonds for financing themselves.

Could you use this for eg. a vehicle for local economic growth, a bond for one particular community, that finances their own economic investment and pays off as they reap the growth benefits??

— Digital Scotland (@DigitalscotNews) August 10, 2018