Austria to Issue $1.35 Billion in Government Bonds Using Ethereum Blockchain

The government of Austria will issue a bond of €1.15 billion ($1.35 billion) using the ethereum blockchain, according to local reports.

According to the report, Austrian bank, Oesterreichische Kontrollbank (OeKB) will issue the bonds on behalf of the country’s Treasury Agency (OeBFA) responsible for the debt management. The bank, which is one of the biggest in the country, will also operate the live blockchain notarization service.

The bond auction which is expected to go live next week, starting October 2nd, will be the first that will be issued over a blockchain network as the country walks its blockchain talks.

Hartwig Löger, the Finance Minister of Austria spoke glowingly about blockchain stating that the emerging technology forms a focus of the country’s economic policy. He disclosed that the ministry, through its newly formed FinTech Advisory Council, was developing strategies that will enable the country to benefit optimally from blockchain development developments.

The blockchain-enabled notarization service will replace the conventional authorization and settlement process used in the past for government bonds in the country. The new system authenticates data from Austrian Direct Auction System (ADAS) as hashes on the ethereum blockchain. It was developed by OeKB, and the bank confirmed that it has been tested internally.

A representative from OeKB Angelika Sommer-Hemetsberger noted that “blockchain technology offers great potential for increasing efficiency and ensuring the quality of bank processes.”

Similarly, Markus Stix, managing director at the Austrian Treasury, said the blockchain technology added more security to the issuance system. “This added security,” Stix says “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 favorable financing costs.”

As Smartereum reported in August, Commonwealth Bank of Australia (CBA) entered a partnership with World Bank to issue a bond of $100 million AUD ($73.16 million USD) through the ethereum blockchain. The deal which was initially mandated in earlier in the month marked the first time the World Bank issued bonds using a blockchain network.

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