September 27, 2018 7:16 PM
The central European country will use blockchain technology in its next federal bond auction.
Austria will hold an auction next Tuesday, October 2, to issue 1.15 billion euros (over $1.34 billion as of press time) in bonds managed by the Austrian Federal Financing Agency (OeBFA), according to a recent report from regional newspaper Kleine Zeitung. The catch? The investments will 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 the OeKB Group, the country’s “central provider of financial and information services to the export industry and the capital market.”
OeKB maintains that this will be the first time a service like its own will be used in one of Austria’s federal bond auctions. The group further noted that it has conducted “successful tests” for the auction system.
OeBFA CEO Markus Stix expressed his optimism for the blockchain-based initiative:
“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.”
Austrian Finance Minister Hartwig Löger also mentioned Austria’s increased focus on blockchain and FinTech in general:
“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.”
OeKB board member Angelika Sommer-Hemetsberger added that “blockchain technology offers great potential for increasing efficiency and ensuring the quality of bank processes.”
However, some reddit users brought attention to the fact that the system would merely function as a notary service – OeKB is only “going to drop checksums of the bonds into the blockchain.” Although the transactions themselves may not occur over the Ethereum network per se, another redditor noted that this process is “definitely a good start” for greater adoption of the technology.
Translations by Google.
Daniel Putney is a full-time writer for ETHNews. He received his bachelor’s degree in English writing from the University of Nevada, Reno, where he also studied journalism and queer theory. In his free time, he writes poetry, plays the piano, and fangirls over fictional characters. He lives with his partner, three dogs, and two cats in the middle of nowhere, Nevada.
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