Colombia’s Central Bank (Banco de la Repblica), IDB Group, and Banco Davivienda have established the country’s first blockchain bond experiment.
The bond will be created, put, traded, and paid on blockchain technology using smart contracts for the Colombian securities market, according to a statement from Banco de la Repblica.
The Inter-American Development Bank, the Inter-American Investment Corporation, and the Multilateral Investment Fund make up the IDB Group.
The pilot will last six months and “seeks to validate the benefits of this innovative technology in the life cycle of a security, from issuance to maturity,” according to Banco de la Repblica.
The bond will be issued by Banco Davivienda, a Colombian bank based in Bogotá, with IDB Invest underwriting the entire offering. According to the release, operations will be recorded in LACChain, a platform developed by BID Lab, “leaving the bond with perfect traceability in blockchain technology.”
The money from the operations will be processed through Banco de la Repblica’s high-value payment system, which will act as an observer node in the blockchain network.
The IDB Group will provide technical support for the proof of concept’s implementation, as well as regulatory and technical guidance, according to the announcement.