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World Bank Raises $33.8 Million via Tokenized Bonds

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World Bank Raises 33 million via Bond-i

The World Bank recently completed the second round of its blockchain-based crowdfunding campaign. This go-around, the firm secured $33.8 million from a variety of investors. The news showcases the rising involvement of major financial institutions in the space.

In a recent interview, the funding head at the World Bank, Andrea Dore discussed the monumental progress his team accomplished so far. He pointed out that the Bond-i is the first bond to live fully within a distributed ledger ecosystem (DLT).

Discussing the decision, Andrea Dore, he praised the innovative atmosphere surrounding the project. He also spoke on the experience gained by his company from the project. He ended by stressing the importance of creating sustainable development goals in the sector.

Bond-i

The Bond-i functions on a private blockchain built by CommBank’s Blockchain Centre for Excellence.  This corporate blockchain borrows much of its technical structure from the Ethereum blockchain. Ethereum-based (ERC) tokens are the most popular in the market.

World Bank via Modern Diplomacy

World Bank via Modern Diplomacy

The Bond-i is unique because it is issued, allocated, managed, and transferred completely on this private blockchain. Speaking on the use of this new technology, CommBank’s head of blockchain and artificial intelligence, Sophie Gilder discussed the advantages of this all-inclusive strategy.

Added Efficiency

Gilder explained that blockchain technology proved to be more transparent, efficient, and manageable than the current systems in use. She went on to describe how the company intends to develop this technology further and deliver additional functionality in the future.

A Team Effort

In order to make this advantageous strategy a reality, the World Bank sought out strategic partnerships. Notably, the Commonwealth Bank of Australia was the actual issuer of the bonds. Additionally, TD Securities and RBC Capital played important roles in the campaign.

World Bank STO Continues

In 2017, the first round of tokenized bonds netted the World Bank around $81 million USD in funding ($110 AUD).  Added to the latest campaign, the World Bank raised approximately $108 million USD to date.

These bonds issued on behalf of the Queensland Treasury Corporation (QRC). Importantly, this was the first time a crypto bond issuance took place with a government agency. The primary fundraising campaign went flawlessly. QTC was able to monitor bids, allocate funds, and settle transactions in real-time via the new system.

Australia is Pro-Crypto

There are a number of factors which made the campaign a success. Primarily, Australia has long been a supporter of blockchain technology. Back in 2016, the International Organization for Standardization chose the country to lead a multi-national team of researchers seeking to standardize blockchain protocol. Also, in July of this year, the country saw the opening of its first Blockchain Charity – New South Wales Charity.

It’s a Movement

The World Bank is sure to see more success in the future as the company is perfectly positioned to expand its blockchain implementation further. The combination of a pro-blockchain regulatory climate and a pioneering team is enough to give the World Bank a strong lead in the sector.

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David Hamilton is a full-time journalist and a long-time bitcoinist. He specializes in writing articles on the blockchain. His articles have been published in multiple bitcoin publications including Bitcoinlightning.com

Bonds

Spencer Dinwiddie DREAM Shares launches January 13th

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Spencer Dinwiddie DREAM Shares launches January 13th

After a sizable delay and numerous run-ins with NBA executives, it now appears that Brooklyn Nets point guard Spencer Dinwiddie will get to bring his tokenization strategy to the market. Dinwiddie took serious heat from the league when he announced plans to tokenize a portion of his contract. Now, after almost three months of delays, Dinwiddie’s token-based investment tool prepares to enter the market.

DREAM Fan Shares

Dinwiddie wants to let his fans own a portion of his contract via the DREAM fan shares platform. This blockchain-based tokenization strategy would allow Dinwiddie to digitize a portion of his contract. These tokenized shares would then be made available to fans seeking to increase their stake in the athlete’s career.

According to Dinwiddie, DREAM shares are set for a January 13th launch date. The date will coincide with Dinwiddie’s first career All-Star Game. In this manner, Dinwiddie can couple the publicity to further promote his unique tokenization strategy.

As part of this strategy, Dinwiddie seeks to sell 90 SD8 coins. Each coin represents a tokenized share in his $34 million contract. If successful, Dinwiddie will be able to collect up to $13.5 million of his guaranteed three-year agreement without having to wait until the final years of the contract. In essence, the agreement provides him with a new age business loan.

NBA Officials not Pleased

For their part, the NBA has been unapathetic towards the young player’s decision to tokenize his contract. These disagreements with the NBA came to a head when the league threatened to terminate his contract and ban him from the league during negotiations. Luckily, Dinwiddie instituted some changes to his strategy which alleviated much of the league’s concerns.

One of the main problems the NBA had with Dinwiddie’s original strategy had to do with his final years. In the original agreement, Dinwiddie wanted to provide his investors with a chance to make larger dividends if he were to acquire a more lucrative contract with Brooklyn or another team. This section struck NBA officials as problematic with some calling it gambling. Officials were so concerned they threatened to terminate his contract if the clause wasn’t removed.

Dinwiddie to Tokenize Contract

Dinwiddie to Tokenize Contract

After four intense negotiations in person and three additional correspondences over the phone, Spencer Dinwiddie was able to secure league approval for his concept. Discussing the decision, he admitted that he never expected the league to support his idea fully. Luckily, he had some strong support for the plan from the Players Association. Also, he had a team of lawyers by his side to ensure that his rights were not violated.

Dinwiddie Just Changed the Game Forever

It’s not too often that a single player changes the game forever, but in this instance, Dinwiddie has utilized blockchain technology to provide more liquidity in the market. You can expect to see DREAM shares start to tokenize more athletes and entertainers’ contracts in the coming months. In this way, these individuals can cash out their multi-million dollar agreements without waiting years to do so.

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Horizon Tech Stack Makes Piemonte Bond Issuance & Trading a Reality

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Horizon Tech Stack Makes Piemonte Bond Issuance & Trading a Reality

Token Listing

It was recently announced that Piemonte Holding has not only completed their issuance of a $16.2 million Ethereum based bond, but that it is now live for trading through secondary markets amongst Piemonte clients.

This development was made possible through utilizing a tech-stack, made available by Horizon.  The company indicates that some of the solutions afforded to Piemonte include the following:

  • Compliance measures
  • Custody
  • Trading solutions

Piemonte indicates that this announcement represents the fruition of multiple years’ worth of hard work.  They state that in as early as 2017, they began to experiment with and incorporate blockchain and its various benefits within their own operations.

Secondary Exchange

One of the #1 draws, and promises, surrounding digital securities is the potential liquidity they will afford investors in the future.

For this promise of liquidity to become a reality, there need to be secondary exchanges hosting these tokens, creating and providing a marketplace for them to be traded.  Without this capability, a major part of the allure revolving around digital securities disappears.

Competitors

Horizon is not the only company that has set out with the goal of establishing a respected secondary marketplace for digital securities.  They do, however, remain one of the first to go live with their offering.

The following companies are just a few of those that are known to be developing similar solutions:

Commentary

Upon announcing the developments discussed here today, representatives from each, Piemonte and Horizon, took the time to comment.

Alessandro Lombardi, CEO of Piemonte, states,

“In August we issued our tokenized Smart Bond and today we’re launching the first regulated bond-trading marketplace on a public blockchain…Although this Smart Bond’s issuance was limited to qualified private investors, the Smart Bond was fully subscribed with zero distribution efforts made by Piemonte. We can only imagine the distribution and liquidity potential of future blockchain bond offerings once these competitive bonds are open to the general public…We believe we are making a transformational and historical deal by streamlining our book-building, investor compliance, asset allocation and bond custody using Horizon’s technology…We share Horizon’s compliance values and believe that this integrated approach helps to provide a streamlined path to usher the bond market into the digital era. We believe that it’s no longer a matter of us asking IF blockchain will underpin major global securities platforms; after today, it’s only a matter of WHEN.” 

Brian Collins, CEO of Horizon, states,

The idea that blockchain could have the potential to open and bring liquidity to the bond market has been discussed, and trialed, at length. Today, we’re proud to work alongside Piemonte to bring their compliance-focused bond market concept to fruition and introduce liquidity potential to a historically illiquid market with our integrated issuance, KYC, AML, custody, and trading solutions.” 

Piemonte Holding

Founded in 2012, Piemonte Holding maintains operations in Rio de Janeiro, Brazil.  The company specializes as an investment manager, by developing, and managing, custom financial products for its clientele.

CEO, Alessandro Lombardi, currently oversees company operations.

Horizon

Operating out of Zug, Switzerland, Horizon is ‘Software-as-a-Solution (SaaS) company, which was founded in 2010.

CEO, Brian Collins, currently oversees company operations.

We recently took a deeper look at the company, and what it is they have to offer.  If interested in learning more about Horizon, be sure to peruse the following article.

Horizon Globex – An In Depth Look at an Industry Leader

Speaking with Brian

Earlier this year, we had the pleasure of completing an exclusive interview with Horizon CEO, Brian Collins, accompanying our own look into the company.  In the following interview we learn more about what the company has achieved so far, and where they plan to go in the future.

Interview Series – Brian Collins, Horizon Globex

In Other News

Horizon has been on a tear lately, with a string of positive developments.  One example of this is the successful completion of their Series A – validating belief, and interest, in the company and what they have to offer.

Horizon Globex Eyes Growth Through Series A

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Santander Redeems Debt Security Early

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Santander Redeems Debt Security Early

This month, the international Spanish banking giant Santander concluded their testing of a blockchain-based securities strategy.  The bank performed an early redemption of a $20 million bond the firm issued on the Ethereum blockchain back in September.

Success

At the time of issuance, the $20 million tokenized bond was a pilot transaction. Developers needed to confirm that the technology would function as promised. Discussing the strategy,  the head of Digital Investment Banking at Santander, John Whelan described the project as a success.

Whelan didn’t mince words as he discussed the progress to date. He exclaimed that the tests “unequivocally proves that a debt security can be managed through its full lifecycle on a blockchain.”  He also spoke on the importance of this technology as a real-world solution for securities issuance. Notably, Whelan is also the chairman of the Enterprise Ethereum Alliance.

Santander – A Tokenized Bond Strategy

In this instance, Santander functioned as both the investor and the issuer. This strategy made testing easier to complete. To begin the process, a custom Ethereum token was made to represent the bond. Santander Security Services provided custody of the cryptographic keys as part of the concept.

John Whelan via Twitter

John Whelan via Twitter

Interestingly, when it was time to cash out, Santander settled it with another token that represents cash held in a custody account. In this manner, the bank streamlined the entire securities issuance and management process.

Whelan took to social media to praise his team’s efforts. In his posts, he provided the public blockchain transactions on Etherscan. Etherscan is a blockchain scanning tool that allows you to find proof of the transactions.

An Important Milestone

While Santander isn’t the first institution to issue a tokenized bond, it is the first major financial institution to use a public blockchain to manage all aspects of a bond’s issuance. To date, other major firms that have stepped into the tokenization sector such as World Bank and Societe Generale. Currently, both banks have tokenization programs in place.

Santander via Twitter

Santander via Twitter

A More Efficient Alternative

One of the key takeaways from the project is that the use of smart contracts removes the need for expensive third-parties. This strategy provides investors with a more secure alternative than the status quo. Smart contracts allow developers and issuers to preprogram the regulatory compliance mechanisms directly into the token. In this manner, the token remains compliant throughout its entire lifecycle, including secondary trading markets.

Santander

Santander began service in 1902. Formerly, Santander went by another name – Sovereign Bank. Today, the bank has offices around the globe with the main North American headquarters based in Boston. Respectfully, the bank has a yearly net income of around  $1.042 billion USD.

Since its inception, Santander has seen great success. Today the bank has over 650 retail banking offices and over 2,000 ATMs internationally. Notably, the bank employs approximately 9,800 people.

Santander Joins the Tokenization Train

This latest news showcases how major financial institutions continue to seek out blockchain alternatives. Now that the testing phase of Santander’s blockchain strategy is complete, you can expect to see a variety of new financial products and tools become available in the coming weeks.

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