The World Bank has appointed the Commonwealth Bank of Australia (CBA) to lead the creation of the first bond built on Ethereum blockchain technology.

Making the announcement last week, the World Bank said it would be “the first bond globally to be created, allocated, transferred and managed through its life cycle using distributed ledger technology”.

Dubbed bond-i, an acronym for Blockchain Offered New Debt Instrument – and a nod to Sydney’s renowned tourist beach – the bond is expected to raise as much as US $73m (£53m), with proceeds going to the World Bank’s sustainable development initiatives.

“Helping countries transition to technology-led development is key to our goals of reducing poverty and promoting lasting development,” said Denis Robitaille, World Bank group chief information officer.

“[…] this pioneering bond is a milestone in our efforts to learn how we can advise our client countries on the opportunities and risk that disruptive technologies offer as we strive to achieve the Sustainable Development Goals,” he added.

Developed with the support of investor consultants including Northern Trust, QBE and Treasury Corporation of Victoria, CBA will act as the sole arranger of bond-i, which will launch following consultation with a “broader set of investors”.

The World Bank commented on blockchain’s potential to “streamline processes” among debt capital market intermediaries and agents, simplify raising capital and trading securities, improve operational efficiencies, and enhance regulatory oversight.

Issuing between US $50-60bn (£39-47bn) annually in bonds for sustainable development, the World Bank isn’t a stranger to pioneering new approaches within capital markets. It launched the first globally traded and settled bond in 1989 and the first “fully integrated electronic bond” in 2000.

“Since our first bond transaction in 1947, innovation and investor satisfaction have been important hallmarks of our success with leveraging capital markets for development,” said World Bank Treasurer, Arunma Oteh.

“Today, we believe that emerging technologies, equally offer transformative, yet prudent possibilities for us to continue to innovate, respond to investor needs and strengthen markets.”