The government of Austria plans to use a public blockchain Ethereum for the issuance of government bonds in the amount of 1.15 billion euros (1.35 billion dollars) and their further distribution in the auction, which will take place next week.
Osterreichische Kontrollbank (OeKB) — is one of the largest Austrian banks with $ 26 billion in assets — will be responsible for the notarization of securities in the blockchain. During the auction, which will be held on October 2, the Bank will issue bonds on behalf of the Austrian Treasury.
The Minister of Finance of Austria Hartwig Löger said:
"The Ministry sees in the blockchain as technology, which sets the tone in economic policy. After the establishment of the Advisory Board at financial technologies under the Ministry of Finance, we have focused on developing strategies that will enable Austria to make optimal use of the possibility of such developments."
According to the Osterreichische Kontrollbank, notarization through the blockchain in the course of the auction of Federal bonds will be carried out for the first time. The procedure, which was successfully tested earlier will be executed according to the system developed by the Bank for "notarize data System Direct Auctions Austria as a hash values in the Ethereum public blockchain".
In this instance, the blockchain will not be used to issue tokenized bonds, which could operate in parallel with paper and digital systems. However, the managing Director of the Austrian Treasury Marcus Stix stated that the use of technology will benefit in the context of increasing security and reducing costs.
"The improvement of safety contributes to ensuring confidence in the process of auction of the state bonds and strengthen the position of Austria on the market, which indirectly also has the capacity to contribute to favourable financing costs."
This summer the World Bank and the Commonwealth Bank of Australia signed a contract to issue public bonds exclusively through the blockchain. The spring of this year, Sberbank CIB — division of Sberbank of Russia, engaged in service of corporate-investment business — complied the first in the country a deal on commercial bonds through the blockchain.