Austrian government to use Ethereum blockchain to notarize $1.3B bond auction

The government of Austria is going to notarize the auction of a government bond worth €1.15 billion (approximately $1.3 billion) using Ethereum blockchain, CoinDesk reported.

The Finance Ministry on Tuesday announced that the Austrian Federal Financing Agency (OeBFA) has assigned Oesterreichische Kontrollbank (OeKB) to carry out the auction on its behalf.

Banking giant OeKB processes export guarantees and issues government bonds on behalf of the Republic of Austria. It is the second-biggest Austrian issuer in international capital markets after the Republic of Austria and offers market players central infrastructure services and financial data.

“Following successful tests, a Blockchain notarization service will be used for the first time at the next week's Federal Bond Auction. 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,” the ministry said (loosely translated).

It will be the first real blockchain operation, the ministry added. OeKB will be responsible for the deployment of the notarization service for authenticating auction transaction data and storing it on the blockchain.

"Blockchain technology offers great potential for increasing efficiency and ensuring the quality of bank processes. 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 ", said Angelika Sommer-Hemetsberger, Member of the Management Board of OeKB.