The International Bank for Reconstruction and Development (World Bank) and Commonwealth Bank (CBA) have enabled recording of secondary market bond trading on Blockchain. This is the first time that secondary bond trading is recorded using distributed ledger technology.
"This illustrates the vast potential to enhance the co-ordination of securities trading and management on blockchain - delivering a verified, permanent record and instant reconciliation," the banks said in a joint press release.
The functionality was developed by CBA in partnership with World Bank and Canadian investment bank TD Securities.
Blockchain-operated new debt instrument, or bond-i, was first issued in August last year by the World Bank. CBA was the sole arranger for the bond.
Sophie Gilder, Head of Experimentation & Commercialization, CBA Innovation Labs, said that since then, the positive feedback and interest from global technology and financial sectors has been extraordinary.
The "bond-i" project is part of a broader strategic focus of the World Bank to harness the potential of disruptive technologies for development. The bond-i blockchain platform was built and developed by the CBA Blockchain Centre of Excellence, based in the Sydney Innovation Lab.
The project is advised by King & Wood Mallesons as legal counsel, and an independent code review is conducted by Microsoft. IHS Markit provide independent valuations.
CBA has a dedicated blockchain team, which has taken a lead role in applying blockchain technology to capital markets.
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