The World Bank and the Commonwealth Bank of Australia (CommBank) have teamed up to enable recording of secondary market bond trading using blockchain tech.

The institutions announced Wednesday that their successful recording of a secondary transaction for bond-i, a blockchain-operated debt instrument, on a distributed ledger shows the "vast potential" of the technology, and marks the first bond to have both issuance and trading recorded on a blockchain platform.

Bond-i was first issued last August by the World Bank, with the CommBank being a sole arranger. The experiment helped the World Bank raise $81 million at the time.

World Bank vice president and treasurer, Jingdong Hua, said:

The blockchain platform was built and developed by the CommBank's Blockchain Centre of Excellence on top of the ethereum network, and was reviewed by Microsoft regarding its architecture, security and resilience.

CommBank Innovation Labs’ head of experimentation & commercialization, Sophie Gilder, commented:

CommBank first revealed a plan to issue a bond over a blockchain system as far back as 2017, saying it was working with an unnamed “major world issuer.”

Other financial institutions across the globe have been recently testing blockchain-based systems for bond issuance, including Santander, Societe Generale and Abu Dhabi-headquartered Al Hilal Bank.

World Bank image via Shutterstock