Category Archives: Arunma Oteh

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President of World Bank: DLT Has “Huge Potential” in Fighting Poverty

Jim Yong Kim, Korean president of the World Bank, has publicly come out in favor of blockchain technology as a tool for fighting poverty in a speech on the Indonesian Island of Bali.

Kim made the comments at the IMF and the World Bank Annual Meeting on October 11, suggesting that DLT had “huge potential” and as a result, the World Bank must keep abreast of emerging technologies.

The World Bank, part of the World Bank Group, is an international financial institution that provides loans to countries of the world for capital projects. It is comprised of two institutions: the International Bank for Reconstruction and Development, and the International Development Association.

At the forefront of all World Bank projects is the need to fight poverty, particularly in underdeveloped or developing nations. Kim referred to the need to combat corruption, often a barrier to successfully supporting developing nations, suggesting that this is a particular area where blockchain could make a significant impact. He commented:

“…we think distributed ledger has huge potential and we issued the first blockchain bond in August, where we created, allocated, transferred and managed the entire bond through blockchain technology.”

He went on to point out that the goal of the bank is to develop universal access to financial services by 2020 which he felt would be unlikely to occur without embracing available technologies and taking advantage of some of the “great things that are coming out,” referring to blockchain and AI.

As Bitcoin News reported recently, the World Bank and The Commonwealth Bank of Australia combined to create an Ethereum-based Australian dollar blockchain bond earlier this year. As for selecting both the CBA and Ethereum for the project, World Bank treasurer Arunma Oteh said that it had worked with the Australian bank for a year before it could launch the project. Ethereum was top of its list as it had “the largest and most active development community globally”.

Oteh continued on a positive note stating that the bank “will continue to seek ways to leverage emerging technologies to make capital markets more secure and efficient.”

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World Bank Mandates First Ever Blockchain Bond

The World Bank has mandated the Commonwealth Bank of Australia (CBA) to authorize the world’s first blockchain bond. The foreign bond issued in Australian dollars has been dubbed bond-i, an acronym for Blockchain Offered New Debt Instrument, as well as a reference to Sydney’s Bondi Beach.

bond-i

A joint press release from the World Bank and the CBA describes bond-i as the first of its kind to be fully managed with blockchain technology. The bonds will be entirely created, allocated and transferred using distributed ledger technology to secure every transaction.

Noting the benefits of applying blockchain technology to bonds, the two organizations wrote in the press release that blockchain is capable of streamlining the processes of a number of debt capital market intermediaries and agents. Several benefits of this are listed, including simplifying raising capital and trading securities, improving the efficiency of operations and augmenting oversight of regulations.

Arunma Oteh, World Bank Treasurer, said: ”We believe that emerging technologies, equally offer transformative, yet prudent possibilities for us to continue to innovate, respond to investor needs and strengthen markets.”

The World Bank and CBA have built a private, Ethereum-based blockchain platform on which bonds will be issued and distributed. The CBA said that they were open to using alternative blockchain networks as the space continues to evolve.

Sophie Gilder, Head of Blockchain Innovation Labs at the CBA said that bond-i is a significant step in unlocking the revolutionary potential of blockchain in financial services and markets.

Investor interest in bond-i has already been strong, according to the World Bank, although it plans further consultations with investors prior to launching the transaction.

The World Bank will run its operations for the bond from Washington, DC, with the institution already responsible for issuing between USD 50-60 billion annually in bonds for sustainable development.

 

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