Title: Webinar on Blockchain Bond
Organiser: The World Bank
Presenters: Coskun Cangoz, Andrea Dore, Paul Snaith & Markus Stix
Date: December 3, 2018
Published By: World Bank Treasury
Since the advent of Blockchain technology like a decade ago, there have been arguments on how the technology will disrupt the way things are done in the financial market. To make trading seamless, Blockchain technology possesses capacities to ensure that the asset management aspect of trading which currently is manual and prone to errors are effectively transformed (Marutitech, 2019). In changing the face of trading in stock market, Blockchain technology will achieve automation of post-trade events; provide mechanism for fairness and transparency; ensure higher liquidity, lower transaction costs and provide mechanism for containment of risk (Som, 2018).
In August 2018, World Bank issued a bond called “bond-i” which runs based on the Blockchain technology. According to World Bank (2018), “bond-i” is a first of its kind when we talk of bond issuance with legal obligation operating on a large scale Blockchain platform in the world which has revolutionized financial transaction innovation.
This webinar was organized with the aim of sensitizing operators or key participants in the financial market to this new product in terms of how it works and share experiences from implementation of the product for government bonds auction in Austria. I attended the webinar in 2018 as a member of staff of Africa Development Bank Group.
Analysis of Webinar
The webinar was presented by four (4) presenters with each given a portion of the Webinar agenda to handle. The presenters are not all in the same location but each person takes his section once the agenda table turns to him or her. The webinar is more interactive where audience were allowed to ask question either at the middle of the webinar or at the end of it all in Q&A session.
How the Process Works
Bond-i is a private Blockchain bond instrument. Blockchain can be private, public or Consortium (Sudhir, 2018) but World Bank goes for a private one where they can control access and permission. Pre-authorized investors use their authentication key and enter bids onto the platform through the web-interface. The World Bank observes book-building in real-time. By Book building, we refer to a process in which using the level of demand by potential investors, the price to be placed on a security instrument subscription is ascertained by an underwriter (James, 2018).
Pricing is finalized. Investors update their bids, supported by direct communication with the World Bank enabled through an online communication function. Investors then see their own bids and allocation in real time. The register is based on the Blockchain ledger and held by Commonwealth Bank of Australia (CBA) in Sydney. Blockchain ledger is also termed distributed ledger is a database that is read from and written into individualistically by each participating computer in the network (Coindesk, 2019).
Final step, cash settlement is “off-chain”. Blockchain transactions can be off-chain or on-chain (Jake, 2018a). Off-chain transaction occurs between two trusted parties who agreed to transfer values with the advantages of being cheaper, faster and more privacy (Blockbasis, 2019). On-chain transaction simply refers to as transaction relates to public ledger and entails validation by certain number of participating nodes (Jake, 2018b).
The benefit of subscribing to the bond-i on the global Blockchain platform as highlighted from the webinar include learning for the World bank, efficiency, transparency, automation, and auditing and reporting.
The webinar to me as it is the first eye opener and contact I have with regards to Blockchain. The webinar provides reach value for me to jump-start my exploit on Blockchain technology especially as it relates to Blockchain development which is an area of interest for me. The quality of the webinar is also top-notch. Though the webinar was more a marketing session for World Bank to showcase their product, it also serves as learning opportunity and exposes one to opportunities and challenges in Blockchain technological world. The case study example of how it is implemented in Austria is also a major boost to drive one’s desire to the technology. There was not really enough time for Q&A as the allotted time was exceeded, there are communication channel available to ask follow-up question post the webinar.
Few days after the webinar, the presentation slide as well as the link to the webinar recorded session was sent to all participants alongside a link to a post webinar survey in other to gather feedback from audience. This is necessary so as to improve more on any area of deficiency from the webinar.
- Blockbasis (2019). What is the difference between on-chain and off-chain transactions?. Retrieved 17 February, 2019, https://blockbasis.com/help/blockchain/difference-chain-off-chain-transactions/
- Coindesk (2019). What is a Distributed Ledger?. Retrieved 17 February, 2019, https://www.coindesk.com/information/what-is-a-distributed-ledger
- Jake, F. (2018a). Off-Chain Transactions (Cryptocurrency). Retrieved 17 February, 2019, https://www.investopedia.com/terms/o/offchain-transactions-cryptocurrency.asp
- Jake, F. (2018b). On Chain Transactions (Cryptocurrency). Retrieved 17 February, 2019, https://www.investopedia.com/terms/c/chain-transactions-cryptocurrency.asp
- James, C. (2018). Book Building. Retrieved 17 February, 2019, https://www.investopedia.com/terms/b/bookbuilding.asp
- Marutitech (2019). Blockchain Technology and its Implications on the Financial Platform. Retrieved 17 February, 2019, https://www.marutitech.com/blockchain-technology-implications-financial-platform/
- Som (2018). How Blockchain will change the way you trade in stock markets. Retrieved 17 February, 2019, https://economictimes.indiatimes.com/markets/stocks/news/how-blockchain-will-change-the-way-you-trade-in-stock-markets/articleshow/62161610.cms
- Sudhir, K. (2018). Different Types Of Blockchains In The Market and Why We Need Them. Retrieved 17 February, 2019, https://coinsutra.com/different-types-blockchains/
- World Bank (2018). Webinar on Blockchain Bond. Retrieved 17 February, 2019, http://www.worldbank.org/en/events/2018/12/03/webinar-on-blockchain-bond#2