Jim Yong Kim, president of the World Bank Group has been talking up the potential of Distributed Ledger Technology (DLT) at an IMF and World Banks’ annual meeting in Bali.
In his speech, Kim talked about ways of fighting poverty while boosting prosperity, saying, “there are innovations in the technological world that can help us leapfrog generations of bad practice, generations that would take forever in terms of reducing corruption.”
He placed a lot of emphasis on technological innovation and encouraged banks to keep pace with the new ideas. He also made an interesting announcement when he said: “We talked about cryptocurrencies, but we think distributed ledger has huge potential and we issued the first blockchain bond in August, where we created, allocated, transferred and managed the entire bond through blockchain technology.” Issuing bonds on the blockchain has attracted wider interest in the last month, especially following some exciting results from firms experimenting in the UK’s FCA sandbox. Plus, during the summer, the World Bank and the Commonwealth Bank of Australia (CBA) issued a public bond exclusively on a blockchain. Cointelegraph reported, “The $73.16 million deal entails two-year bonds that reportedly settled Aug. 28 and have been priced to yield a 2.251 percent return.”
He also pointed out that within his banking group, using blockchain had reduced paperwork and costs, but added that the bank has not been keeping up with all the latest developments; at least not in a way that would help its customers take advantage of the “great things that are coming out,” as Kim put it.
According to Kim, the World Bank’s goal is to develop universal access to financial services by 2020, which he believes will not happen without deeper engagement with the new technology.
However, although Kim is bullish about the blockchain, he remains more sceptical about digital currencies and doesn’t appear to have changed his mind about the statement he made to CNBC last October, when he said: “Blockchain technology is something that everyone is excited about, but we have to remember that Bitcoin is one of the very few instances [of blockchain’s use in currency]. And the other times when blockchain was used they were basically Ponzie schemes, so it’s very important that if we go forward with it, we’re sure that it’s not going to be used to exploit.”