The World Bank has confirmed its support for a Kenyan mobile phone-based bond issuance project called M-Akiba which will, among others, seek to assess the use of Blockchain technology to simplify the platforms that will back its system

M-Akiba allows users to purchase government bonds in very small amounts, without the need for a bank account.

The pilot phase of this first-of-a-kind mobile-only government bond for US$1.5 million was launched in March 2017 with transactions ranging from US$30 to US$140.

The main launch for US$50 million is planned for June.

According to the Bank, its team from Finance and Markets has worked with the Central Bank of Kenya (CBK) and the National treasury to design this product since 2011.

As of 6 April this year, the bond has been fully purchased by 5,692 investors. The Treasury is now partnering with Safaricom to launch an awareness campaign to rally support for the June launch.

In parallel, the CBK is also finalising the Treasury Mobile Direct (TMD) which would be the mobile channel for existing retail investors into government bonds (about 8000) and would allow the separation of retail and wholesale investors in the primary auction.

With Blockchain beneath the new project, its key asset of ensuring transaction immutability having eliminated the need for an enforcer of trust in the ecosystem would be valuable for M-Akiba.

Apart from proposing to support with market research on assessing the use of Fintech technology particularly Blockchain to simplify the platforms backing the system, the Bank's team will also help with improvements to the product to fit the profile of the unbanked potential savers (instead of the 3-year bond) and institutional set ups to manage the platform to eliminate intermediation layers between the Treasury and investors.

In its 'The future of financial infrastructure' report last year, The World Economic Forum stated that Blockchain has great potential to drive simplicity and efficiency through the establishment of new financial services infrastructure and processes.

Its tamper-proof feature data enables an environment in which trust is not an issue and allows counterparties to operate with a single version of the truth.

Though awareness of the Blockchain technology - or distributed ledger technology - has grown rapidly, significant hurdles remain to large-scale implementation, especially the low level of collaboration within its regulatory environment.