The Commonwealth Bank of Australia has announced what it describes as a world first: The use of Bitcoin-inspired blockchain technology to issue a bond.
The bond — dubbed a “virtual cryptobond” by CBA — was issued by the Queensland Treasury Corporation, the Queensland government’s central financing authority.
The transaction used CBA’s private blockchain platform. For the trial, QTC was both the issuer and the investor. CBA said that its blockchain platform was used to generate a bond tender, view investor bids in real time, finalise investment allocation and settle instantly.
The “working prototype” bond has the ability to automatically pay coupons to its holder when due, CBA said.
The bank said that the use of a decentralised digital ledger streamlines the issuance of bonds and simplifies settlement, using a single platform for both the bond register and payment platform.
“We are delighted QTC and our other government treasury partners are participating in the project,” CBA’s head of blockchain, Sophie Gilder, said in a statement.
“Building the capital markets platform and collaborating with forward thinking partners has accelerated our understanding of blockchain in the real world.
