The government of Austria has put everything in place for an Ethereum public blockchain in order to issue €1.15 billion ($1.35 billion) of government bonds in an auction scheduled to hold next week. The official release was brought to the knowledge of the public by Kleine Zeitung, a local news outlet.
One of Austria’s largest bank, Oesterreichische Kontrollbank (OeKB), with about $26 billion in assets in 2017, has reportedly operated the live blockchain initiative will be issuing the bonds on behalf of the Austrian Treasury (OeBFA) during the auction.
Austrian Government Picks Interest in Blockchain
Hartwig Löger, Austria’s Finance Minister, hinted that the ministry believes that the blockchain technology “forms a focus on economic policy.” He further stated that;
“Through setting up the FinTech Advisory Council at the Ministry of Finance, we are developing strategies enabling Austria to benefit optimally from these developments.”
OeKB’s spokesman stated that this is the first time that a blockchain related notarization service will be implored as a fragment of a Federal Bond Auction in Austria. There has been reported that the procedure was successfully tested, this will paint a picture of a system that has been developed internally by the bank to “notarize data from Austria’s established system — the Austrian Direct Auction System (ADAS) — “as hash values on the Ethereum public blockchain.”
According to the report, the use of a blockchain-based network does not in no way indicate an issuance of tokenized bonds that would function concurrently with existing paper or virtual system. Reportedly, Markus Stix, the managing director at the Austrian Treasury stated that the use of fintech has significant benefits for both security and cost reduction. Stix was quoted saying;
“This added security contributes to achieving a high level of confidence in the auction process for Austrian government bonds and strengthens Austria’s good standing in the market, which indirectly also has the capacity to contribute to favourable financing costs.”