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World Bank Issues Second Tranche of Blockchain Bond Via Bond-i

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The World Bank (International Bank for Reconstruction and Development, IBRD rated Aaa/AAA) has raised an additional AUD 50 million for its Kangaroo bond due August 2020 – the first bond created, allocated, transferred and managed through its life-cycle using distributed ledger (blockchain) technology.

The successful tap expands market participation with the Bond-i platform combining three joint lead managers, Commonwealth Bank of Australia (CBA), RBC Capital Markets (RBC) and TD Securities (TD), and brings together new market participants, including an offshore investor, and the exisiting investor community including ongoing support and input from TCorp (NSW Treasury Coporation).

In August 2018, CBA was mandated by the World Bank as arranger for the bond and following a two-week consultation period with the market, the two-year bond raised A$110 million. In May 2019, CBA and the World Bank, with TD acting as market maker, added additional capability to the platform by enabling Secondary Bond Trading recorded on Blockchain making this the first bond whose issuance and trading are recorded using distributed ledger technologies.

The subsequent issuance builds on the success of the platform and further enables capital markets to leverage distributed ledger technologies for faster, more efficient, and more secure transactions.

Bond-i is part of a broader strategic focus of the World Bank to harness the potential of disruptive technologies for development to benefit the World Bank’s clients. The World Bank’s blockchain innovation lab was established in 2017 as an innovation hub for poverty reduction projects across the world and includes developing opportunities to use blockchain and other disruptive technologies in areas such as land administration, supply chain management, health, education, cross-border payments, and carbon market trading.

“We are happy to see the continued, strong support and collaboration from investors and partners. The World Bank’s innovation and experience in the capital markets is key to working with our member countries to increase digitization to boost productivity in their economies and accelerate progress towards the Sustainable Development Goals,” said Andrea Dore, World Bank Head of Funding.

“The tap is an important milestone in demonstrating the full lifecycle management of an issuer’s capital markets needs. It is also a significant step for the platform bringing on additional participants and demonstrating the broader potential of Bond-i as a capital markets platform,” said James Wall, Executive General Manager International at Commonwealth Bank.

Debt capital markets today comprise numerous interconnected intermediaries and agents undertaking intersecting roles for markets to function. Blockchain has the potential to streamline processes for raising capital and trading securities, improve operational efficiencies, as well as enhance regulatory oversight.

“CBA now has tangible evidence from our first bond offering using blockchain technology and subsequent bond management, secondary trading and tap issue via the same platform, that blockchain technology can deliver a new level of efficiency, transparency and risk management capability versus the existing market infrastructure.  Next we intend to deliver additional functionality to deliver greater efficiencies in settlement, custody and regulatory compliance,” said Sophie Gilder, Head of Blockchain & AI, Commonwealth Bank of Australia.

CBA, RBC, and TD have been lead managers for a number of IBRD bond issuances in the Australian and New Zealand capital markets. This issuance built on the longstanding partnership between four organisations, bringing together World Bank’s 70-year track record of innovation in the capital markets, CBA’s globally recognised Blockchain Centre of Excellence, and TD and RBC’s significant global franchises in debt capital markets.

“An increase to the line is a natural evolution for the trade providing a great opportunity for both new and existing investors to get involved. As a market maker on the platform, TD is very excited to have partnered up with World Bank and CBA again and be part of the next step in the platform’s development,” said Yuriy Popovych, Director TD Securities.

“RBC is very pleased to be involved in the next stage of evolution of World Bank’s bond-i issue, the most advanced practical application of blockchain technology to the debt capital markets to-date,” says Jigme Shingsar, Managing Director, Debt Capital Markets at RBC. “Though the technology is still in its early stages, we believe blockchain networks have the potential to transform financial services, offering a leap forward in the transparency and efficiency of our market.”

The blockchain platform was designed and developed by the CBA Innovation Lab’s Blockchain Centre of Excellence.

Important information

·          An independent review of the CBA blockchain platform’s architecture, security and resilience was conducted by Microsoft.

·          The law firm of King & Wood Mallesons acted as deal counsel on the bond issue and advised on the legal architecture for its implementation.

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EU Politics

Rwanda: EU provides €10.3 million for life-saving refugee support measures

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During his visit to Rwanda, Commissioner for International Cooperation and Development Neven Mimica has announced a €10.3 million support package to the UNHCR’s Emergency Transit Mechanism (ETM) in Rwanda, which provides a life-saving avenue out of Libya for people in need of international protection, with a view to their further resettlement. The funding is provided through the Emergency Trust Fund for Africa. This initiative builds on the example of the ETM Niger, through which more than 2,900 refugees and asylum seekers have been evacuated out of Libya since 2017.

High Representative/Vice-President Federica Mogherini said: “The Emergency Transit Mechanism in Rwanda is a vital life-saving measure to bring people in need of international protection out of Libya. It is an important sign of African solidarity and of partnership with the European Union. It broadens the support to the most vulnerable people held in Libyan detention centres that need to be closed urgently.”

Commissioner Mimica said: “This project will support efforts of the Government of Rwanda to receive and provide protection to about 1,500 refugees and asylum-seekers who are currently being held in detention centres in Libya. Such a remarkable and powerful proof of African solidarity should be further encouraged, replicated and supported.”

Background 

The UNHCR has evacuated more than 4,250 refugees and asylum-seekers out of Libya to other countries since 2017.

However, around 4,700 people are currently estimated to be held in dire conditions inside detention centres in the country. They urgently need to be moved to safety and to be provided with protection, lifesaving assistance, and durable solutions.

Following the escalation in and around Tripoli, namely the July air strike on a migrant detention centre, the EU continues to support the vital work of the Gathering and Departure Facility on location.

The EU is also supporting the UNHCR’s increased efforts to transfer to Tripoli the most vulnerable people in need of international protection from conflict areas where they are at risk, pending their evacuation outside of Libya.

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ADB Program to Help Improve Education and Health in Armenia

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The Asian Development Bank (ADB) has approved a $10 million policy-based loan (in euro equivalent) to assist the Government of Armenia’s efforts to improve the quality and accessibility of education and health services.

Armenia is experiencing a demographic shift with the share of children under the age of 18 declining from 37% of the national population in 1990 to 25% now, signaling an impending decline of the country’s labor force. Access to and funding for quality education and health services are poor, resulting in many people not having the skills to meet employers’ needs and avoidable ill health having a detrimental effect on the population.

In 2017, for instance, public expenditure on education was about 2.2% of gross domestic product (GDP), which is lower than the 5% recommended by the Organisation for Economic Co-operation and Development. Government health spending was at 1.3% of GDP, below the 5% threshold observed by the World Health Organization as expenditure of countries with low shares of out-of-pocket payments.

To address this, the Government of Armenia has implemented reforms since 2010 to improve education and health services, with a focus on helping women and girls. A preschool law was endorsed to the National Assembly with the aim of boosting the number of children in elementary schools to 70% in 2023, from around 30% in 2017. Teachers have also been receiving training and skills development. A new set of guidelines and protocols, meanwhile, have been implemented in most of the country’s hospitals and health centers, covering topics ranging from preventing hospital-acquired infections to methods in continuing medical education.

“A well-educated and healthy population is essential for the growth and development of a country like Armenia, where human capital is significantly unrealized,” said ADB Senior Health Specialist for Central and West Asia Ms. Rouselle Lavado. “ADB’s assistance will support the government’s ongoing efforts to ensure that citizens are educated, healthy, and productive.

The main focus of the Human Development Enhancement Program is children and youth, starting from the preschool age. As well as improving the accessibility and enhancing the quality of education and health services in the country, the program will also increase financing for these efforts.

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Human Rights

ICC gives greenlight for probe into violent crimes against Rohingya

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Judges of the International Criminal Court (ICC) on Thursday authorized an investigation into alleged crimes against humanity, namely deportation, which have forced between 600,000 and one million Rohingya refugees out of Myanmar, into neighboring Bangladesh since 2016.  

The pre-trial judges “accepted that there exists a reasonable basis to believe widespread and/or systematic acts of violence may have been committed that could qualify as crimes against humanity of deportation across the Myanmar-Bangladesh border” the Court said in a press statement, in addition to “persecution on grounds of ethnicity and/or religion against the Rohingya population.” 

After a reported military-led crackdown, widespread killings, rape and village burnings, nearly three-quarters of a million Rohingya fled Myanmar’s Rakhine state in August 2017 to settle in crowded refugee camps in neighboring Bangladesh. 

This is the second strike against the alleged crimes this week, as the tribunal’s decision follows a Monday submission by Gambia to the UN’s principal judicial organ, the International Court of Justice (ICJ), accusing Myanmar of “mass murder, rape, and genocidal acts” which violate its obligations under the Genocide Convention, in addition to destruction of villages, arbitrary detention, and torture.  

As a member to the Genocide prevention treaty, Gambia “refused to stay silent”, and as a member of the Organisation of Islamic Cooperation (OIC), the small African nation has taken legal action to assist the persecuted majority-Muslim Rohingya, with support by other Muslim countries.  

In July, the ICC’s top Prosecutor, Fatou Bensouda, requested an investigation be open into the alleged crimes committed since October of 2016, concerning Myanmar and Bangladesh.  

At that time, her Office’s preliminary examination found “a reasonable basis” to believe that at least 700,00 Rohingya were deported from Myanmar to Bangladesh “through a range of coercive acts causing suffering and serious injury.” 

Under the Rome Statute that created the ICC, which highlights crimes against humanity as one of its four crucial international crimes, the top Prosecutor concluded sufficient legal conditions had been met to open an investigation.  

While Myanmar is not a State party to the treaty, Bangladesh ratified the Statute in 2010, meaning authorization to investigate does not extend to all crimes potentially committed in Myanmar, but will focus on violations committed in part on Bangladeshi territory, the ICC said in July.  

‘Only justice and accountability’ can stop the violence 

Judges forming the pre-trial chamber, Judge Olga Herrera Carbuccia, Judge Robert Fremr, and Judge Geofreey Henderson received views on this request by or on behalf of hundreds of thousands of alleged victims.  

According to the ICC Registry, victims insist they want an investigation by the Court, and many “believe that only justice and accountability can ensure that the perceived circle of violence and abuse comes to an end.” 

“Noting the scale of the alleged crimes and the number of victims allegedly involved, the Chamber considered that the situation clearly reaches the gravity threshold,” the Court said.    

The pre-trial Chamber in addition authorized the commencement of the investigation in relation to any crime, including future crime, so long as it is within the jurisdiction of the Court, and is allegedly committed at least in part in the Rome Statute State Party, Bangladesh, or any other territory accepting the jurisdiction.  

The alleged crime must also be sufficiently linked to the present situation, and must have been committed on or after the date of the Statute’s entry into force for Bangladesh or the relevant State Party.  

Judges from the ICC have given the greenlight for prosecutors to commence collection of necessary evidence, which could result in the judge’s issuance of summonses to appear in court or warrants of arrest. Parties to the Statute have a legal obligation to cooperate fully with the ICC, nonmembers invited to cooperate may decide to do so voluntarily. 

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