The World Bank Group has partnered with the Commonwealth Bank of Australia (CommBank) to issue a bond over a blockchain.

CommBank, one of the “Big Four” commercial banks in Australia, said in a release on Friday that it had won a mandate from the World Bank to arrange the issuance of the bond, which will be created, transferred and managed via a blockchain platform.

The technology, already developed by CommBank’s in-house blockchain lab, aims to have key parties in a bond issuance process such as investors and banks to be participating nodes in a distributed network. In this way, capital for the bond can be raised and transacted more efficiently.

Called “bond-i,” the debt issuance already has input from investors including Northern Trust, QBE Insurance and Treasury Corporation of Victoria.

The World Bank’s treasurer, Arunma Oteh, said in the release that the tech has been prepared for the launch after a year of development with CommBank. That said, the issuance timeline and size of the bond remain unknown at this stage.

According to the release, the World Bank issues $50–$60 billion in bonds every year as part of its mandate to reduce poverty and improve sustainability for worldwide markets.

Denis Robitaille, CIO at the World Bank, commented in the release:

“This pioneering bond is a milestone in our efforts to learn how we can advise our client countries on the opportunities and risk that disruptive technologies offer as we strive to achieve the Sustainable Development Goals.”

CommBank, which designed and developed the platform, said it is a private blockchain on top of the ethereum network and had been reviewed by Microsoft regarding its architecture, security and resilience.

The announcement follows the news in December 2017 that CommBank was developing a blockchain system for bond issuance in collaboration with a “major world issuer,” whose name was not disclosed at the time.

Currently, several major financial institutions in the world, including JP Morgan, the Agricultural Bank of China, and BBVA, have already tested blockchain-based systems for bond and loan issuance.

World Bank image via Shutterstock