Austria To Raise €1.15 Billion Bond Auction Using Ethereum Blockchain

According to reports from Oesterreichische Kontrollbank (OeKB), Austria is planning to leverage blockchain notarization to raise about €1.15 billion in its federal bond auction scheduled for next week.

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As the issue of debt grows in Austria, the European nation has revealed plans to raise funds of up to €1.5 billion in a bond auction scheduled for October 2.

Austria to raise €1.5 billion using a public Ethereum blockchain

According to reports from Oesterreichische Kontrollbank (OeKB), Austria is planning to leverage blockchain notarization to raise about €1.15 billion in its federal bond auction scheduled for next week.

Oesterreichische Kontrollbank has the responsibility of leading the auctions for the issuance of federal bonds, serving as a neutral capital market participant for the Austrian Federal Financing Agency (OeBFA).

On Tuesday, Austria will be issuing two bonds — one to mature in 5 years, while the other in 10 years.

According to the publication, the ten-year bond will yield interests as high as 0.78% over the next ten years.

Blockchain and the digitization of the finance sector in Austria

According to the report, this process of fundraising using blockchain is intended to lead the way for the deployment of distributed ledger technology in raising sovereign bonds in Europe.

Furthermore, the bonds will be authenticated and issued via the Ethereum blockchain to reduce costs of bond issuance, and increase efficiency.

In a statement, the Austrian finance minister Hartwig Löger stated that:

“For us, blockchain technology is an important part of economic policy. With the establishment of the Fintech Council in the Ministry of Finance, we are developing strategies so that Austria can profit from these developments as much as possible.”

The Austrian finance minister also noted that the digitization of the financial sector has long been present in Austria, emphasizing the need to use the positive effects of the FinTech sector intelligently to improve financial services.

Löger further stated that blockchain technology has become an important economic policy for the European nation which is developing strategies to make the best possible use of the technology.

Similarly, Angelika Sommer-Hemetsberger, who is currently a member of the OeKB management board, explained in a statement that blockchain offers great potential for increasing the efficiency and quality of banking operations in the nation.

Angelika Sommer-Hemetsberger further stated:

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

Austria to use notarization to verify data

Markus Stix, the managing director of the Austrian Treasury, told Kleine Zeitung that blockchain notarization, which provides a significantly high-security service, will be used to verify data authenticity during fundraising.

According to Stix, the technology will also strengthen Austria’s standing in the market, and possibly indirectly contribute to favorable financing.

Stix further noted before picking Ethereum’s blockchain OeKB had evaluated several other blockchains, and, in the future, distributed ledger technology and similar solutions will be deployed as the main technology in many aspects of Austria’s public administration.

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