‘World’s first public blockchain bond’ as dubbed by the World Bank has been priced at AUD$100 million ($73 million).
The duration of bond would be two-years, aimed at improving the efficiency of automated financing for countries under extreme poverty by removing decades-old process of manual bond sales. The bond would will be settled by Commonwealth Bank of Australia (CBA), on August 28 as reported by Reuters.
Dubbed ‘Bondi’ acronym for Blockchain Operated New Debt Instrument – with a subtle hint towards famous ‘Bondi beach’ – CBA would be the sole arrange and is expected to yield a return of 2.251%. The bond has been engineered specifically for the “kangaroo” deal (bonds issued by overseas institutions in Australian $), CBA adds in the report.
When compared with other similar prototypes and pilots on blockchain, the CBA insists that Bondi is the first instance where a legally valid bond issuance is raising capital directly from investors, esp. when it’s completely issues and managed on a blockchain.
To be noted, World Bank annually issues $50 billion – $60 billion in form of bonds for sustaining development in emerging nations.
The new bond, Bondi would be issued and managed on a private Ethereum blockchain which would further be jointly operated by the World Bank and CBA.