Will the bond be the bond between blockchain and the (corporate) masses?
News came this week from the world of distributed ledgers that the World Bank seeks to offer bonds underpinned by blockchain, to be offered through Australia’s Commonwealth Bank (CBA). The move is one that brings blockchain more firmly into the financial services realm – and specifically, directly into financial product/asset offerings. The Commonwealth Bank has a blockchain-based system in place, already, at this writing.
The debt will be known as bond-I, as Cointelegraph reported. As for the bank, it issues $60 billion in bonds annually, with the forthcoming bond developed through the Australian Bank’s Blockchain Centre of Excellence, based then (as will be the upcoming bond issuance) on Ethereum. It’s not necessarily a standing start, as the lab there had already tested a “prototype” bond issuance last year. The site noted that this may be the first bond issued across blockchain, but would not be the first debt instrument, as the bank known as BBVA last month floated a $117 million loan across blockchain.
Cointelegraph noted that the CBA has said it is willing to explore other blockchain platforms beyond the current one that employs Ethereum. And, as the site further noted, the World Bank and the CBA are using blockchain without cryptocurrencies, reporting that “it’s fair to say that mainstream financial institutions have gone as far as divorcing cryptocurrency from blockchain, with the former seen as an unnecessary byproduct of the technology.”
In China, a Blockchain Primer – and Some Use Cases
Beyond “blockchain for bonds,” the Communist Party of China has debuted a primer that covers blockchain technology, as noted on government websites earlier this month.
The primer covers what blockchain is and how it operates, along with current and possible deployments. The goal, according to various crypto-focused sites, is to help government authorities understand what is behind distributed ledger technology (DLT) and to bring efforts to bear on new blockchain-related initiatives.
In addition, the country’s Ministry of Industry and Information Technology said that a blockchain laboratory would be a key goal for this year, with an eye on boosting tech security. The announcements come on the heels of news that the Bank of China plans to invest funds in blockchain development and the Internet of Things. The amount is significant, at one percent of annual operating income, a tally that based on last year’s results comes in at about $70 billion.
Also in China, and in an example of use case adoption, Cointelegraph reported that the state-owned China Aerospace Science and Industry Corp. is adopting blockchain to better manage its invoice system, which the site termed “unwieldy.” Stats published on government sites estimate that there are as many as 1.3 billion electronic invoices in circulation, at least as had been measured last year. That number may swell to as much as 54 billion in just a few more years.
And in further proof that China is the place to be for blockchain – well, among the most desirable places to be, anyway – CNBC reported that Ripple has set its sights firmly on that market. Jeremy Light, who serves as VP of European Union strategic accounts at the firm, told CNBC that “China is definitely a country and region of interest.”
As has been reported, the company has a deal in place with LianLian International, a financial services firm based in Hong Kong, a partnership that is focused on cross-border transactions. The move to boost presence in China, said CNBC, is one that would not be tied to making inroads with the cryptocurrency known as XRP. There already is some presence in Asia, noted the site, as Ripple has an app in Japan called MoneyTap, in turn underpinned by 61 lenders.