WASHINGTON: The World Bank is taking a step into the brave new world of digital finance to sell the first-ever bond to be issued entirely using blockchain technology, the bank announced on Friday.
More than just funds, the World Bank aims to gain experience using blockchain -- a digital public registry of transactions -- that could lead to "a golden future" for financial services for developing nations, a bank official told AFP.
The technology is most often associated with cryptocurrencies -- like bitcoin -- which often raise suspicion about their reliability and volatility, as well as their use for criminal purposes.
But because there as yet is no central bank-backed digital currency in existence, the two-year blockchain bond will rely on real-world money: Australian dollars.
The Washington-based development lender aims to raise about Aus$50 million (about $36 million), although it could be double that if more investors get involved before the bond is finalised the week of August 20.
"Since our first bond transaction in 1947, innovation and investor satisfaction have been important hallmarks of our success with leveraging capital markets for development," World Bank Treasurer Arunma Oteh said.
"Today, we believe that emerging technologies, equally offer transformative, yet prudent possibilities for us to continue to innovate, respond to investor needs and strengthen markets."