UBS donated its Blockchain-based code to the non-profit organization HEAL Alliance to help research in HIV.
On January 21, 2016 it was announced that HEAL Alliance will use the code, originally developed by Switzerland's largest bank UBS for trading platform of smart contracts using Bitcoin Blockchain, to issue “HEAL Bonds” of $10 billion to fund the project that aims to research and fight HIV.
Oliver Bussmann, UBS’s chief information officer, commented that this is one of the first of the bank’s lab experiments with great potential:
“This experiment confirmed the potential benefits: clearing and settlement on blockchain could be faster, more efficient and transparent while reducing settlement risk and operational cost.”
HEAL bonds issuance
A London-based FinTech company Finclusion has developed a special platform that will allow to test new bonds from January 21 to April 20, 2016. By the end of the testing period HEAL bonds will be placed in the open market.
Moreover, the UK Financial Conduct Authority (FCA) programme will support this project to ensure it is compliant with existing regulations.
Adam Vaziri, a tech-lawyer, commented on the legal concerns about issuance of HEAL Bonds:
“From a basic regulatory standpoint it is a bond (so a Specified Investment) and the activities of the platform will be ‘arranging deals’ in that investment; so without question if this is a private blockchain with some intermediation between the investors and the product then the system will be deemed a form of Brokerage or regulated Exchange.
It is certainly an interesting test and ‘bonds’ are great to test smart contracts due to the regular coupons and the heavy administrative costs involved with their management. Ian Grigg’s Ricardian Contract from a while back envisaged the administrative gains in managing bonds through cryptographic hashes. This is a great experiment and wonderful to see the FCA get involved.”