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Speaking at the International Monetary Fund and the World Banks’ Annual Meeting on October 11, World Bank president Jim Yong Kim stated blockchain technology has “huge potential” and banks should keep pace with the innovative disruption.
Kim noted that blockchains help reduce corruption by their transparent, immutable ledger-keeping. He further addressed the importance of fighting poverty while boosting the economy and creating jobs, which sectors big data sectors like blockchain and AI promise in emerging markets. For Kim, technological adoption is the only method to ward off the clutches of corruption, while the timely deployment of technological innovations in the world can help “leapfrog” generations of bad practice.
Kim noted the World Bank’s first issuance of a blockchain-based bond in August 2018, an experiment which saw the bank raise 73.6 million USD for testing an automated bond issuance strategy. Based on promising results, he added that distributed ledger systems have “huge potential,” considering the Australian bond was created, allocated, managed, and transferred using only blockchain technology.
After the success of the Australian bond, World Bank treasurer Arunma Oteh stated that the bank “will continue to seek ways to leverage emerging technologies to make capital markets more secure and efficient.”
The World Bank head stated blockchain systems help reduce paperwork and costs significantly, adding the benefits are “something that can be extremely helpful” in the years to come. However, he drew attention to the bank’s cautious approach to all latest fintech developments, particularly those which help its customers to take “great advantages” of rising innovations.
According to Kim, the bank’s goal for 2020 is to develop robust financial services infrastructure that promotes global inclusivity regardless of economic strata, which in his opinion, “will not happen” unless the group engages considerably with the technology world.
In 2018, the bank set up a blockchain lab to lead innovation, research, and fund distributed ledger technology projects aiming to improve governance, finances, and social economies.