On 25th September, Kleine Zeitung, a local news portal in Austria reported that the country has planned to auction government bonds worth €1.15 billion [=$1.3 billion] that will be authenticated with the assistance of the Ethereum blockchain. Oesterreichische Kontrollbank [OeKB], which is one of the leading banks in the country will begin the notarization service on 2nd October and carry out a live operation on the blockchain.
Furthermore, the government bonds are to be issued on behalf of the Austrian Treasury [OeBFA]. At the onset of the news, an official from the OeKB stated that this will be the first time for the blockchain technology to be used in government bond auction. The official said:
“Following successful tests, a Blockchain notarization service will be used for the first time at the next week’s Federal Bond Auction.”
Angelika Sommer-Hemetsberger, a board member of OeKB appreciated the new technology. She stated that blockchain offers massive strength in accelerating the efficiency and growth of bank processes and simultaneously keep the quality of those operations in check.
It was also reported that the current situation of the debt scenario of Austria has fevered down recently. This has caused the government bonds to face a fair amount of pressure and the interest rates to increase to a minor extent.
According to Markus Stix, the Chief Executing Officer of OeBFA, the security ensured by the blockchain technology will raise the level of confidence in the auction process of the Austrian government bonds. He also stated that the move will provide Austria’s position a good spin in the market, leading to financial benefits.
Several other countries have begun to realize the significance and potential in the blockchain technology and cryptocurrencies. One of the most popular examples of such a country is Venezuela. The country built its own cryptocurrency known as Petro and has frequented the use of the DASH token to help its financial situation.
SimoMace, a Twitter user and a finance space enthusiast on the news commented:
““Debt used to finance government spending is acceptable if: the benefits of the spending must be greater than the costs, the government spending must be directed at projects the private sector cannot do on its own, and the overall debt level must be sustainable. by James Rickards”