Cryptocurrency has emerged as the latest innovation in the financial industry with many traditional financial organizations embracing the technology. The crypto boom which occurred last year December saw an increased awareness on the power of digi coin in the current economic sphere.
This has led to several companies investing in blockchain technology as many push for the adoption of several stable coins alongside fiat currency. Also, multinational organizations have also joined the race to develop digi coins.
The World Bank recently revealed a partnership with the Commonwealth Bank of Australia to develop a new blockchain bond which would use Ethereum technology. The two financial organizations are set to launch the blockchain bond after meeting with investors.
The details of the arrangement have not been revealed in total with just some snippets released to the public, but it is believed that the new bond would be developed on the Microsoft Azure cloud platform according to news from MIT Technology Review.
It is thought that Microsoft recently researched the blockchain platform to make an independent analysis of the platform. Some of the things checked were the functionality, reliability and security of the CBA blockchain platform.
Other details revealed by the World Bank indicated that Investors had made their interest in the blockchain platform known and there was an overriding interest to create a blockchain bond. The financial organization also revealed that the crypto has a massive interest in the Australian financial market.
The Blockchain Bond Is The First Of Its Kind
The World Bank on the whole normally issue bonds of around $60 billion yearly to fund multiple projects across the world. The blockchain bond would be the first of its kind and would start in Australia with Commonwealth Bank of Australia the sole operator of the Ethereum powered bond in Australia.
The World Bank has always embraced new financial technology, having issued the first traded and settled bond in 1989 and the first electronic traded bond in 2002. So the crypto bond follows an antecedent for the World Bank.
The financial institution views blockchain as bringing a streamlined process which can improve the procedures among debt capital market intermediaries and brokers. This would improve the complex process of raising capital and trading securities.
Blockchain has proven among significant digital coins to be operationally fast, reliable and secure with numerous transactions handled daily. The World Bank believes with regulatory procedures this can improve the operation of this system.
Blockchain Bond To Be Named Bond-I
According to the press release the new blockchain bond would be classified as bond-I which means Blockchain offered a new debt instrument. The organization also said that money raised from issuing the bond would be sent to the reconstruction and development division.
Also, there are other minor partners in this blockchain project which includes QBE, Northern rust, Treasury Corporation of Victoria. The project is legally advised by Legal firm King&Wood Mallesons and would proffer the Legal framework for the bond while acting as a deal counsellor.
This project has been under consideration for a year with the World Bank sending analysts to work with the Commonwealth Bank of Australia to check the viability of the project. Both partners after numerous considerations came about the plan to launch the blockchain bond.
Ethereum The Preferred Blockchain Technology For The Project
Ethereum was chosen as the preferred blockchain technology due to its position as the largest and most active community worldwide. This according to the World Bank is part of the blueprint but could change in the future with Ethereum facing new rivals in that respect.
Commonwealth Bank of Australia is not new to blockchain technology and have been using it for a while to run other projects. Most recently the Bank shipped and tracked seventeen tones of almond using diverse blockchain system.
The Bank employed the use of blockchain technology, IoT and Smart contracts to supervise the almond supply chain with a group of the almond industry supply chain stakeholders.
These latest developments show how blockchain has evolved as many mainstream traditional institutions cannot continue to resist the new financial movement. The approval by the World Bank to start issuing blockchain bonds is an excellent development for the adoption of cryptocurrencies.
Analysts believe that by the end of 2018 the digital currency market would be worth a massive 1 trillion dollars as more investments and technology arises.