Smart bond (finance)
A smart bond is a specific type of an automated bond contract that uses the capabilities of blockchain databases that can operate as cryptographically-secure yet open and transparent general ledgers.[citation needed] It is one of a class of financial instruments known as a smart contract, "a computerized transaction protocol that executes the terms of a contract."[1]
History
As early as 2014, banking executives were speaking publicly about the ability of blockchain technology to trigger significant "simplification of banking processes and cost structure."[2]
As of 2015[update], UBS was experimenting with smart bonds that use the bitcoin blockchain[3] in which "risk free interest rates and payment streams [could be] fully automated, creating a self-paying instrument."[4] The Huffington Post reports than an announcement of the UBS smartbond service is expected in 2016.[5]
In 2018, the World Bank mandated the Commonwealth Bank of Australia for the world’s first blockchain bond.[6]
References
- ^ Tapscott, Don; Tapscott, Alex (May 2016). The Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World. pp. 72, 83, 101, 127. ISBN 978-0670069972.
- ^ Irrera, Anna (2014-10-27). "UBS CIO: Blockchain Technology Can Massively Simplify Banking". Wall Street Journal. Retrieved 2016-05-27.
- ^ Ross, Rory (2015-09-12). "Smart Money: Blockchains Are the Future of the Internet". Newsweek. Retrieved 2016-05-27.
- ^ Wigan, David (2015-06-11). "Bitcoin technology will disrupt derivatives, says banker". IFR Asia. Retrieved 2016-05-27.
- ^ Seaman, David (2016-08-10). "Ethereum: Here Come The Big Banks". Huffington Post. Retrieved 2016-08-11.
- ^ "World Bank Mandates Commonwealth Bank of Australia for World's First Blockchain Bond". The World Bank. Retrieved 22 April 2019.