Commonwealth Bank of Australia issues government bond on blockchain

The bank says Queensland Treasury Corporation (QTC) successfully used the blockchain to generate a bond tender, view investor bids in real time, finalise investment allocation and settle instantly with investors. QTC acted in both the issuer and investor role to test the end-to-end process for the issuance.

The QTC bond was created in digital form using smart contract technology, and has the ability to automatically pay coupons to the current holder when due.

Commonwealth Bank’s dedicated blockchain team developed the prototype in the bank"s Innovation Lab, in conjunction with the Institutional Banking & Markets’ debt markets team and its clients.

George Confos, executive general manager of business & corporate finance at Commonwealth Bank, says: “Our proof-of-concept demonstrates blockchain is capable of delivering efficiency to issuers, investors and other market participants. Blockchain makes it possible to increase efficiency and transparency, which will redefine how capital markets operate.