Founded in the mid-1940s with the stated objective of reducing global poverty, the World Bank is keenly looking at the blockchain tech development. Like its sister organization, the International Monetary Fund, it also aims to benefit from decentralized computing. However, the institution is not too eager to support cryptocurrencies, but that’s another story; today, we are looking at what the World Bank thinks and does related to blockchain. Let’s get started, shall we?
The World Bank president likes blockchain
In a recent interview with CNBC – the president of the World Bank, Jim Yong Kim, had some positive things to say about blockchain. He said that the technology is “something everyone is excited about,” adding that he doesn’t think the same of cryptocurrencies.
“Blockchain technology is something that everyone is excited about, but we have to remember that bitcoin is one of the very few instances,” he said. “And the other times when blockchain was used they were basically Ponzi 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.”
We can’t agree with that statement — and neither do companies that are already accepting bitcoin payments — but we can understand the place he’s coming from. Yong Kim is there to protect the existing order of things with national governments and big corporations moving things left and right. But I digress…
The World Bank Blockchain Lab
As part of the effort to get hold on new technology, the World Bank has established its very own blockchain lab to pilot projects that can improve governance and social outcomes in the developing world.
Initially though, the Lab will serve as a forum for learning, experimentation and collaboration on distributed ledger technology. To that end, it will seek to bring together internal and external participants to work on blockchain use cases of significance to the bank’s more than 80 client countries.
On the other hand, the Lab will also help World Bank emerge as a thought leader in the space as more countries explore blockchain solutions. Among the areas the Lab will look into are land registry, digital identity, aid distribution and financial infrastructure.
Sebastian Molineus, director of the World Bank’s finance and markets global practice, believes that blockchain’s true potential is not just in individual use cases, such as payment facilitation, but in rewiring the entire financial infrastructure of developing countries.
“This is not just a fad or something that people are talking about in the abstract, it is something that is real and something that will trickle into our development work,” he said.
World Bank supports blockchain bonds trial in Kenya
One of the World Bank’s most concrete steps in blockchain adoption was its move to support a mobile phone-based bond issuance in Kenya. Dubbed “M-Akiba,” the project has raised $1.1 million for the African country, with Kenya’s government planning to sell roughly $47 million in similar products. And, it is reportedly considering how blockchain could improve the issuance process.
“The project’s development objective is to strengthen the legal, regulatory and institutional environment for improved financial stability, access to and provision of, affordable and long term financing,” the World Bank said in a report.
On the ground, the World Bank is working with the country’s Public Debt Management Office (PDMO) — which oversees the country’s public-sector debt — as well as the Capital Markets Authority and the Central Depository & Settlement Corporation (Kenya’s central securities depository).
The international financial institution has been actively working to improve Kenya’s financial system since 2015, backed by $37 million in funding.
World Bank & blockchain: What’s next?
Chances are we’ll be hearing more from Washington D.C. — the headquarters of the World Bank — regarding blockchain. From land records to bond issuance and even healthcare applications, we think that the institution along with other international actors has a role to play in making blockchain a mainstream technology. Whether it ends up approving some cryptocurrency or not is a different matter. Cause Bitcoin and Ethereum are seemingly poised to keep growing… and growing. With or without the blessing of the World Bank…