On August 9, 2018, the World Bank issued a press release highlighting what it described as the “World’s First Blockchain Bond.” It will be issued in Australia and, according to news reports, will be called a BONDI—both in honor of the famous Australian beach and also a clever acronym for “Blockchain Offered New Debt Instrument.” The issue size is approximately AUD $100 million (about USD $74 million).
Current regulations in the United States limit the ability of securities to trade exclusively over a blockchain, but over time we believe they will become more commonplace as the rules and market practice adapt. More fundamentally, there is a huge potential in blockchain to disrupt the current U.S. trading and settlement process that developed after the paperwork crisis of the early 1970s and is now based on a decades-old business model.