The World Bank on August 23 launched bond-i, a blockchain operated new debt instrument. It is the world's first bond to be created, allocated, transferred and managed through its life cycle using distributed ledger technology.

The two-year offering amounting to A$110 million (US$79.70 million) was priced at 99.901% with a coupon of 2.20% to offer a yield of 2.251%. This marked the first time that investors have supported the World Bank's development activities in a transaction that is fully managed using the blockchain technology.

The bond was launched after a two-week market consultation period; this followed the announcement of the deal mandate on August 10. The World Bank says foundation investors in bond-i contributed to the project through their feedback on the platform structure and functionality.

Investors in the bond include: Commonwealth Bank of Australia (CBA), which was the sole lead manager for the transaction, First State Super, NSW Treasury Corporation, Northern Trust, QBE, South Australian Government Financing Authority (SAFA), and Treasury Corporation of Victoria.

CBA and the World Bank will continue to welcome investor interest in the bond throughout its life cycle, and also enquiries from other market participants in relation to the platform.

The bond is part of a broader strategic focus put in place by the World Bank to harness the potential of disruptive technologies for development. In June 2017, the bank launched a Blockchain Innovation Lab to understand the impact of blockchain and other disruptive technologies in areas such as land administration, supply chain management, health, education, cross-border payments and carbon market trading.

The bond-i blockchain platform was built and developed by the CBA Blockchain Centre of Excellence, housed in the Sydney Innovation Lab. This project builds on the leadership and experience of CBA's dedicated blockchain team, which has taken a lead role in applying blockchain technology to capital markets.

Service providers to the bond's platform include TD Securities as market maker, IHS Markit as independent valuation provider, Microsoft as independent code reviewer and King & Wood Mallesons as deal counsel.