ZCZC
BCN-16
WORLDBANK-BONDS-COMPUTERS-BLOCKCHAIN
World Bank says demand for blockchain bond tops expectations
WASHINGTON, Aug 24, 2018 (BSS/AFP) – The World Bank raised Aus$110 million
($80.9 million) in the first-ever blockchain bond offering following investor
demand that exceeded expectations, the global lender announced Thursday.
The Washington-based bank, which has embraced blockchain as a valuable
tool in its economic development mission, had initially expected to garner
Aus$50 million ($36.8 million) for the two-year bond, with a possible
doubling of that size depending on investor interest.
“I am delighted that this pioneer bond transaction using the distributed
ledger technology, bond-i, was extremely well received by investors,” World
Bank Treasurer Arunma Oteh said in a statement.
“We are particularly impressed with the breadth of interest from official
institutions, fund managers, government institutions and banks.”
Blockchain is a digital public registry of transactions that has aroused
considerable enthusiasm in financial and government circles over its
potential to facilitate transactions and improve supply chains and product
verification in myriad industries.
World Bank areas of focus that could be helped by blockchain and other
disruptive technologies include land administration, health, education and
carbon markets, the bank said.
Investors included Commonwealth Bank of Australia, First State Super,
Northern Trust and the Treasury Corporation of Victoria.
Derek Young, chief operating officer for group investments at QBE
Insurance Group, another investor, said in remarks provided by the bank that
blockchain offered “untapped potential for the application of this product to
capital markets.”
There is no central bank behind blockchain. The vehicle will be organized
around Australian dollars.
The technology is most often associated with cryptocurrencies — like
bitcoin — which often raise suspicions about their reliability and
volatility, as well as their use for criminal purposes.
However, even some critics of bitcoin have said blockchain offers
significant potential among emerging financial technologies.
Microsoft was an independent code reviewer for the bond offering, while TD
Securities served as market maker.
BSS/AFP/HR/1012