The Queensland Treasury Corporation has successfully issued a ‘virtual cryptobond’ using the Commonwealth Bank’s blockchain platform.
The bond is a world first, the bank said, and was created using “smart contract technology” that enabled the Queensland Treasury Corporation (QTC) to “generate a bond tender, view investor bids in real time, finalise investment allocation and settle instantly with investors”.
QTC acted as both the issuer and investor for the bond in order to test the end-to-end issuance process for the bond, Commonwealth Bank (CBA) said.
“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,” CBA said.
“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.”
CBA executive general manager of business and corporate finance George Confos said the proof-of-concept “demonstrates blockchain is capable of delivering efficiency to issuers, investors and other market participants” and will improve both efficiency and transparency in the future.
QTC deputy chief executive and managing director Grant Bush said the test had so far been helpful to the organisation in understanding blockchain technology.
“We are looking at the long-term implications of the technology as a semi-government issuer and broader market participant,” he said.
“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.”
JP Morgan Asset Management has signed on to a new service from global funds network Calastone, introducing automated settlements to its Morg...
The Australian market for impact investments, which aims to deliver social or environmental impact alongside a financial return, is reported...
The bank has taken a grim outlook on the COVID-19 crisis and has provisioned for downside economic scenarios. ...