Blockchain technology is becoming a firm favorite for government economies across the globe. Austria is the latest country to speak of its desire to implement the technology. Austria will use Ethereum’s blockchain, but for what?
Well, the European country is looking to raise funds. It will be auctioning $1.3 billion worth of government bonds and will use Ethereum’s blockchain to authenticate the contracts. But will it manage to raise such a large sum? We will know next Tuesday.
Austria will use Ethereum’s Blockchain
Austria‘s primary financial services institution for its export industry and associated markets, The Oesterreichische Kontrollbank (OeKB), is going to auction off new government bonds as of next Tuesday.
The new bonds will use the Ethereum blockchain and will help manage public debt amounting to $1.3 billion. The OeKB is working in tandem with Austria’s Federal Government Finance Agency (OeBFA) to implement the technology.
Economic Policy Focus
According to Austria’s Finance Minister Hartwig Löger, blockchain technology is “an economic policy focus for Austria.” Such is the focus that the country established the FinTech Advisory Council to help encourage and manage growth in sectors using distributed ledgers.
The government bonds will be a form of investing. In purchasing a bond, investors will effectively be loaning the government money to be repaid over a pre-determined settlement period. There will be interest added on to the repayment so as to incentivize bond-holders to invest in the first place.
In this particular case, repayments won’t be made until 2023, and even 2028 in some cases.
So these bonds represent a long-term trial, if you will, of using the Ethereum blockchain in this manner.
How Will Ethereum Work Here?
Austria will use Ethereum’s blockchain, but how? According to Hard Fork, the technology will work as follows:
“Ethereum will pull data about the bonds from the Auction Procedure for Federal Bonds of the Republic of Austria (ADAS). It will then notarise the bonds as a HASH value in Ethereum’s blockchain. The Republic of Austria guarantees the bonds and the Luxembourg Stock Exchange lists them […] Ethereum will write data related to the conditions of the bond to its blockchain for its immutability and trustlessness.”
Europe has not been shy of its love for blockchain technologies. Malta has been making itself a ‘blockchain Island,’ Berlin been described as a “Hot Spot” by Ethereum’s own Joseph Lubin, Switzerland has used the technology for voting, and then there are cities like Zug, which is a booming blockchain business hub.
Featured Image: Depositphotos/© g0d4ather