The president of the world bank group Jim Yong Kim has expressed his view that blockchain technology has “huge potential” and that the bank should keep pace with innovative technologies. Kim’s remarks came at the international monetary fund (IMF) and the world bank’s annual meeting in Bali, Indonesia. Kim spoke of the importance of addressing poverty while at the same time boosting prosperity, pointing out that “there are innovations in the technical world that can help us leapfrog generations of bad practice, generations that would take forever when it comes to reducing corruption. Kim said, “We talked about crypto-currencies, 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.”
Kim further noted that blockchain technology had been a big help when it came to helping the institution cut down on costs such as the use of paperwork adding that it is “something that can be extremely helpful” in the future. He, however, admitted, that the institution had been stuck in its ways and had done very little in keeping up with all the latest developments, particularly in a way that would help their customers take advantage of the “great things that are coming out.” According to Kim, the World Bank’s goal is to develop universal access to financial services by 2020 which, in his opinion, will not happen without deeper engagement with the technology world.
The World Bank and the Commonwealth Bank of Australia (CBA) had issued a public bond exclusively on a blockchain. The $73.16 million bond entailed two-year bonds that reportedly settled Aug. 28 and have been tipped to yield a 2.251 percent return. Following the immediate success of the blockchain platform, Arunma Oteh, a treasurer at the world bank, stated that the bank “will continue to seek ways to leverage emerging technologies to make capital markets more secure and efficient.” The president of the world bank has in the past voiced criticism towards digital currencies. He has also spoken positively in the past about blockchain technology while noting risks of blockchain derivatives like Bitcoin.
In an interview with CNBC a year ago, 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 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.” It is clear that the world bank chief has been blowing hot and cold about this issue, but if his recent words are anything to go by, the institutions’ mentality towards cryptocurrency has taken a major shift.
