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.”
- OpenLedger’s Apptrade (www.apptrade.io), the platform creating “Kickstarter for Apps on the Blockchain”, has received a $100,000 USD boost from OpenLedger ApS, the world’s first blockchain powered conglomerate. Powered by the digital token APPX, Apptrade creates portfolios, or groups, of apps, where if one of those apps becomes the next Instagram or Angry Birds, then the value of the portfolio rises. Ronny Boesing, CEO of OpenLedger ApS, explained that Apptrade’s initial token offering (ITO) changed its valuation in the middle of its crowd sale as an immediate response to the result of its preliminary offering. Boesing said, “The Apptrade platform is much too important to not succeed, and it was clear that we needed to adjust the valuation to make it more appealing to anyone deciding to participate. In addition, we wanted to show our belief in this project, and felt that there was no better way to show this than putting our money where our mouth is. OpenLedger will be adding a total of $100 000 USD to the Crowdsale over the next 7 days.” The minimum fundraising goal is $1M USD with a cap of $5M USD. With a total of 8.25M APPX tokens on offer, OpenLedger’s Apptrade ApS will back these tokens with 20% of the future revenue from the Apptrade platform, and any unsold tokens will therefore be distributed proportionally to all participants. All early bird participants, as well new participants, will receive the extra tokens according to the published Stage 1 structure, plus benefit from the additional tokens to be divided. Daniel Pineda, Founder of Apptrade says, “After listening carefully to feedback from public and private supporters, and with great consideration, we decided to update our master token valuation. We firmly believe that our platform, built on the ecosystem of OpenLedger and powerful BitShares financial trading technology, is a strong Blockchain project that will be a success for years to come. We feel that this is the right action to ensure a satisfactory outcome for all.” Apptrade’s final valuation is going to be based on the amount raised, whether $1M USD as its threshold or money back guarantee, or the maximum of $5M USD. The valuation of the Apptrade platform will be determined on what is raised. The deadline according to the escrow agreement is set to end on April 30 2017. Boesing continued, “This approach and change of valuation resulted from requests from within the community, and we hope to accommodate many more participants. But one thing is clear to all of the Early Birds – this is your lucky day!” - March 27, 2017
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