Australia’s Commonwealth Bank and QTC Create the World’s First Government Bond using Blockchain

177

Share with:


The Commonwealth Bank of Australia (Commonwealth Bank) has issued a cryptobond for Queensland Treasury Corporation using its capital markets Blockchain platform, in the first Blockchain bond issuance by a government entity both in Australia and in the world. 

 

The transaction marks the first trial of Commonwealth Bank’s private, permissioned Blockchain platform for the end-to-end issuance of bonds. 

George Confos, Executive General Manager of Business & Corporate Finance at Commonwealth Bank, said:

“Our proof-of-concept demonstrates Blockchain is capable of delivering efficiency to issuers, investors and other market participants. Blockchain makes it possible to increase efficiency and transparency, which will redefine how capital markets operate.

“We will continue to collaborate and work with clients, financial institutions and consortiums like R3, as well as with market participants, to understand the opportunities and real life applications of innovative and emerging technologies,” Mr Confos added.

Queensland Treasury Corporation (QTC) successfully used the Blockchain to generate a bond tender, view investor bids in real time, finalise investment allocation and settle instantly with investors. QTC acted in both the issuer and investor role to test the end-to-end process for the issuance.

The QTC bond was created in digital form using smart contract technology, and has the ability to automatically pay coupons to the current holder when due. The bond is a working prototype, is not tradable and does not carry any debt obligation. 

Commonwealth Bank’s dedicated Blockchain team developed the Blockchain prototype in the Innovation Lab, in conjunction with the Institutional Banking & Markets’ debt markets team and its clients.

The use of a decentralised digital ledger for a bond streamlines the issuance process, optimising the transparency of price and demand discovery during the bond’s bookbuilding process. The Blockchain platform also simplifies the bond settlement process by acting as both the bond register and payment platform, consolidating the investors’ payment and the issuers’ title transfer into a single, instant transaction.

Sophie Gilder, Head of Blockchain at Commonwealth Bank said:

“We are delighted QTC and our other government treasury partners are participating in the project. Building the capital markets platform and collaborating with forward thinking partners has accelerated our understanding of Blockchain in the real world. Our long term view is Blockchain technologies will significantly alter capital markets dynamics, changing the way participants interact, with increased efficiency having positive impacts on risk, cost and transparency.”

Grant Bush, Deputy CEO and Managing Director, Funding and Markets at QTC said:

“QTC is collaborating with CBA to experience the technology first hand through a working bond prototype. For QTC, we are looking at the long-term implications of the technology as a semi-government issuer. The collaboration with CBA and other stakeholders involved is proving to be extremely useful as we can understand and think through applications along the way based on the prototype.”

About Richard Kastelein

Founder, Publisher and Editor in Chief of industry leading online publication, Blockchain News and co-founder and director at Blockchain Partners in London/Amsterdam/NYC. Kastelein is also an advisor with a number Blockchain startups doing ICOs including Humaniq.co where hs is interim CMO, DECENT.ch, Inchain, Chronobank, eGaas and others. He is regarded as one of the top journalists by the Blockchain and fintech communities – as is evident by his entry in the Top 150 Fintech journalists online and in the top 10 of the Blockchain Top 100 List.

As a prominent keynote presenter, he has spoken on Blockchain at events in Gdansk, Amsterdam, Minsk, Dubai, Antwerp, Eindhoven, Bucharest, Nairobi, Tel Aviv, Manchester, Brussels, Barcelona etc, where he helped spread the cause for Blockchain technology and cryptocurrency and, consequently, has built a notable network in the scene.

He’s also a director of a Dutch foundation called The Hackitarians and has run innovation events in London, San Francisco, Berlin, Amsterdam and other cities around the world on topics such Blockchain, Health, Energy, Internet of Things, AI etc.

In 2013, the European Commission appointed him as an expert for overseeing financing for emerging startups as a part of the European Commission’s 90 billion euro Horizon 2020 project, created in Brussels to promote innovation as a driving force of job creation and business ventures across Europe. He has also worked as an external expert for Innovate UK since 2012, judging startups for the UK government.

Visit Website
View All Articles
Buy Bitcoin at CEX.IO

Get Blockchain News Where You Are!

Join our Linked in GroupLike our Facebook Page
Linkedin Group BlockchainLinkedin Facebook Group