- Modern day innovations like cryptocurrencies are essential to reduce corruption and cost
- Distributed Ledger Technology has great potential
- The World Bank created the world’s first blockchain-based public bond
The World Bank and the International Monetary Fund have said blockchain is transforming the economic and financial landscape, and that modern-day innovations like cryptocurrencies are essential to reduce corruption and the cost of doing business, especially in low-income countries.
The World Bank Group President Jim Yong Kim was giving a keynote address when they jointly launched a guideline for policymakers globally with the International Monetary Fund. The paper discusses their handling of the rise of financial technology, also known as Fintech.
Bali Fintech Agenda
The paper, christened the Bali Fintech Agenda, was launched October 12th, on the Indonesian island during the annual IMF and World Bank meeting. Both organizations stated that the paper is futuristic and doesn’t represent current work nor does it aim to offer specific guidance or policy advice. The World bank President told the gathering their goal was to make sure everyone is involved. He stated:
“There are technological innovations that can help us leapfrog generations in terms of reducing corruption, and this includes cryptocurrencies, but the Distributed Ledger Technology has great potential […] we created and allocated our first blockchain bond in August through blockchain technology, this reduced paperwork and reduced the costs, and this can be extremely helpful in the future.”
The World Bank created the world’s first blockchain-based public bond in August and exceeded its $73 million goal to raise $80.48 million. The Commonwealth Bank of Australia was the sole lead manager of the deal and intended to settle the entire bond. This was the first time the World Bank was settling a blockchain bond. The World Bank Treasurer Arunma Oteh reported that there had been “huge” interest and said further:
“I am delighted that this pioneer bond transaction using the distributed ledger technology, bond-i, was extremely well received by investors.”
The continued acceptance of digital currencies for international payments and transfers has influenced the new trend of making donations via cryptocurrencies, especially in conflict areas without the properly functioning financial establishments
Duty to keep up with technology
The World Bank President said the group has not been keeping up with the latest technological developments, but Jim Yong Kim said it was the World Bank’s responsibility to keep up with the pace of technological change.
He emphasized that they would do it in a way that will help their clients take advantage of the great things that are coming. Further, he said they would help in setting up a good policy framework to ensure they achieve their goal of financial inclusion by 2022.