Blockchain Offered New Debt Instrument What is the World Bank? An - - PowerPoint PPT Presentation

PROJECT BONDI

Blockchain Offered New Debt Instrument

What is the World Bank?

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• An international organization owned by 189 member countries – its owners are its clients.
• Purpose is to end extreme poverty and promote shared prosperity in a sustainable manner. These

“twin goals” are aligned with the Global Goals.

• The world’s largest source of development finance and expertise – 70 years of financing development

projects.

– About US$185 billion in loans outstanding in about 80 countries. – Nearly 12,000 staff in 136 offices – including in the Washington, DC headquarters

• Largest shareholders are: US, Japan, China, Germany, UK and France.
• International Bank for Reconstruction and Development (IBRD/“World Bank”) is rated AAA/Aaa based on its

capital, reserves and prudent financial policies.

IBRD Invests for Impact Globally

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JAMAICA

Improving Urban Infrastructure & Services

• >50,000 people will have improved

solid waste managementservices

• >10,000 people haveelectricity
• 1,200 families with waterpipe access
• 4,500 provided with jobs training

IBRD Financing: $42 million

PANAMA

Connecting rural mothersand children with quality health services

• 200,000 people have access to

mobile healthunits

• Babies <1 year of age with

complete vaccinationrecords

• More births attended by

skilledpersonnel IBRD Financing: $40 million

BRAZIL

Improving water quality and environmental sustainability

• Integrated environmental

licensing and waterrights managementsystems

• 20% efficiency

improvements in water use IBRD Financing: $70.28 million

GABON

Boosting Women’s Employment

• 12,750 women are

expected to benefit from new jobs and skills bythe project’s end in2019 IBRD Financing: $18 million

CHINA

Reducing greenhousegas emissions in farming communities

• CO2eq. emissions reduced by

800,000-1,000,000 tons/year

• 400,000-500,000 rural

households get cleaner biogas- based cookingand heating systems IBRD Financing: $120 million

ARMENIA

Improving Education Readiness and Quality

• 2400 preschoolenrollees
• 120 communitybased preschools
• 107 high schoolswith improved

education resources IBRD Financing: $15 million

Bonds for Sustainable Development

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• World Bank purpose is a social one – all bonds

issued by the World Bank support sustainable development.

• Investors support various sectors: agriculture,

education, energy, finance/trade/industry, governance, health and social services, transportation, water/sanitation and themes: gender, environment.

• Newsletters

http://treasury.worldbank.org/cmd/pdf/World-Bank- Investor- Newsletter.pdf

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WBG Blockchains Initiatives

Cross- border Payments Personal Identificat- ion Carbon Market Land Administr- ation Healthcare Industry Supply Chain Managem- ent Financial Inclusion

Central Bank Issued Digital Currency

Blockchain for Development

PROJECT BONDI – OUR OBJECTIVE

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Broaden our knowledge of Blockchain and Distributed Ledger Technology Gain hands-on access to frontier technology and advanced Fintech partners Consider how new Fintech-enabled market structures might benefit the Bank and our clients Explore the potential applications of blockchain for development

BLOCKCHAIN

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Process Automation Reduced Reconciliation Market Visibility Regulatory Oversight

Blockchain technology is widely accepted as having the potential to offer new capabilities for capital markets, where participants can share information and transact through trusted data structures common to multiple participants. Blockchain is a shared immutable ledger that creates a trusted record and history of transactions. Information held on a blockchain exists on a shared and continually reconciled database.

MARKET STRUCTURE

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Register maintained by Reserve Bank of Australia Austraclear System operated by Austraclear Ltd Register - based

• n the Platform

Registrar - CBA

IBRD IBRD Participants Participants

Deed Poll and Registry Services Agreement Note obligations owed to person registered as holder by the Registrar RBA enters Austraclear Ltd in the Register as Holder Austraclear Ltd is the legal

• wner of Notes

Austraclear Regulations and Participant accounts Austraclear holds benefits of Notes registered in its name for Participants in Austraclear system Participants may either hold the interest in Notes for themselves, or on behalf of others (as custodian). Note obligations owed to person registered as holder by Registrar Deed Poll and Registry Services Agreement Holders in whose name the Platform registers Notes are the legal

• wners of notes

Holders recorded in register maintained on Platform, governed by Platform Rules and Platform Procedures.

MARKET PARTICIPANTS

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THE PLATFORM

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• Permissioned consortium blockchain network
• Private version of Ethereum protocol
• Proof-of-Authority consensus algorithm (AuRa)
• Off-chain payments; no change to internal systems
• Code review conducted by Microsoft
• King & Wood Mallesons acted as legal counsel

Cybersecurity Consideration for Blockchain

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• 1. Does the wallet have security vulnerabilities?
• 2. Are private keys properly secured?
• 3. Do you have a way to patch your blockchain platform?
• 4. What do you do if a vulnerability is found in the smart contract language / runtime

you use?

• 5. Do you have a way to upgrade your smart contracts?
• 6. Should you run some components in a TEE module?
• 7. Is there enough validation of external interactions (off-chain Dapps, oracles, etc.)
• 8. Does the blockchain network have enough Byzantine tolerance?
• 9. Will your smart contract fail gracefully?

Potential Implications of Project Bondi

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Eliminate many of the current reconciliation processes Reduce the opacity of current market structures and improve market transparency Allow direct and secure holding of assets, bypassing custodians Digitally orchestrate the actions of multiple parties and reduce costs paid to intermediaries Reduce potential data corruption or loss: an immutable, append-only record may provide a higher quality of data than replication across many intermediaries Achieve fast “atomic” settlement, if issues of digital currency can be resolved or accepted

Project Bondi – Future

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Feb-19 Aug-19 Feb-20 Aug-20

• Additional market makers
• Enhanced secondary market functions
• Additional investors
• First coupon payment
• Enhanced reporting functions

& investor interface

• Second coupon payment
• Possible regulators and other

market participants to host nodes

• Third coupon payment
• Potential for “on-chain” payment…?
• IBRD first blockchain bond maturity

Join the action

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Let’s work together to adopt innovation and stay relevant to our clients. BlockchainLab@worldbankgroup.org

Than ank k you

• u!