Australia’s Commonwealth Bank (CBA) has been mandated by the World Bank to exclusively use blockchain on its AUD Kangaroo bond – which is also known as Bond-i. It will be the first bond issue in the world to be created, allocated, transferred and managed exclusively using blockchain technology. The two organizations are working together on a private Ethereum blockchain, but are open to alternatives for future projects. The CBA has created an Innovation Lab and Blockchain Centre of Excellence – this is largely the reason behind the World Bank choosing to partner with CBA on this project.
Microsoft Getting its Boots Dirty
Not one to miss out on a groundbreaking project, Microsoft assisted the CBA and World Bank by reviewing the blockchain platform’s architecture, security, and resilience – ensuring that it meets the highest standards. Back in America, Microsoft has been working on its own blockchain solutions, giving it the perfect credentials to conduct these tests. It is currently working on a blockchain to distribute royalties from its Xbox store purchases to game developers more efficiently. Currently, the remittance process can take well over a month, but in its new plans Microsoft aims to make this process nearly instant.
Speeding Up Operations
By using blockchain technology, the CBA and World Bank hope to speed up the process of raising capital via bond issues. If this first bond issue using only blockchain is successful, the CBA will expand its use of blockchain technology throughout its operations. In addition to added speed, the CBA has noted that it will help to provide enhanced regulatory oversight.
CBA Pushing for Blockchain Technology
Earlier in July, the CBA successfully tracked and delivered cargo from Melbourne to Hamburg using blockchain technology. It utilized distributed ledger technology, the Internet of things, and smart contract to ensure the cargo was safely delivered to its final destination.
Not Completely Crypto Friendly
The Bank of Queensland has taken a stance against its clients that are using the equity in their home loans to purchase cryptocurrencies. The bank adjusted its terms and conditions after Australian regulators stepped up their scrutiny of cryptocurrencies following excessive volatility in the markets. In addition to this change in terms, the Australian Tax Office has ramped up its surveillance of crypto owners, so they can be appropriately taxed. Taxation rules for crypto in Australia are the same as for other investments.
This partnership between the CBA and World Bank could drastically change the current financial service scene as it is currently known. It can take up to a week to cash out of bonds under the current system, and by implementing blockchain technology this time could be slashed to just a matter of minutes. We are keeping a close eye on the progress of this test, as all things considered it could prove to be a legitimate game changer.