Austria To Use Ethereum Blockchain To Track Government Bonds

Blockchain, Innovation, News | September 28, 2018 By:

The government of Austria will be utilizing the ethereum blockchain to monitor $1.3 billion in government bonds.

Oesterreichische Kontrollbank (OeKB), one of the country’s biggest banks, has been assigned to carry out the auction on behalf of the Austrian Federal Financing Agency (OeBFA) on October 2. The bonds will reportedly be notarized using the ethereum blockchain’s public ledger and facilitated by an internal service called the Austrian Direct Auction System (ADAS), which was developed by OeKB.

OeKB said this will be the the first time a blockchain-based notarization service will be used as part of a Federal Bond Auction in Austria.

“Following successful tests, a blockchain notarization service will be used for the first time at the next week’s Federal Bond Auction,” the official release said. “Next Tuesday (2 October 2018), two outstanding German government bonds (0.75 percent Federal Bond 2018 – 2028 and 0.00 percent Federal Bond 2016 – 2023) will be topped up with a total volume of € 1.15 billion.”

Angelika Sommer-Hemetsberger, member of the management board of OeKB, said that blockchain technology offers great potential for increasing efficiency and ensuring the quality of bank processes.

“We have been dealing with this topic intensively for some time now and have already tested several prototypes,” Sommer-Hemetsberger said. “Starting the real operation on behalf of OeBFA is a pleasing and logical next step.”

OeBFA CEO Markus Stix said that the use of the blockchain technology has key benefits for both security and cost reduction.

“This increased security contributes to a high level of confidence in the auction process of Austrian government bonds and strengthens Austria’s good standing in the market, which can also indirectly contribute to favorable financing costs,” Stix said.

Austrian Finance Minister Hartwig Löger touted blockchain technology as “an economic policy focus” for the country.

“Blockchain technology is an economic policy focus for us, and with the establishment of the FinTech Advisory Council in the Ministry of Finance, we are developing strategies to help Austria make the best possible use of these developments,” Löger said.