federal bond auction: Austria relies on Ethereum Blockchain

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austria - federal bond auction: Austria relies on Ethereum Blockchain

The auction of new Austrian government bonds scheduled for next Tuesday will also see the introduction of blockchain technology for the first time. Austria thus has a Europe-wide pioneering role in government bond issues, said the responsible for the conduct of the auction Oesterreichische Kontrollbank (OeKB) on Tuesday.

austria - federal bond auction: Austria relies on Ethereum Blockchain

In concrete terms, OeKB uses a public blockchain solution based on the blockchain system Ethereum, as affirmed by Kleinen Zeitung. Technically, the project was implemented internally by the IT department of OeKB.

OeKB conducts the auctions on behalf of the Federal Government Finance Agency (OeBFA) responsible for the debt management of the republic. This has planned for next Tuesday, the new inclusion of 1.15 billion euros.

“Following successful tests, a Blockchain notarization service will be used for the first time at the next week’s Federal Bond Auction,” says OeKB. Data from the auction system ADAS (Auction Procedure for Federal Bonds of the Republic of Austria) are notarised as HASH value in Blockchain.

The blockchain technology was launched with Bitcoin and is the basis of all crypto currencies like Bitcoin, Ethereum, Ripple, Monero, Dash etc.

It works like a cash book. One page in the book corresponds to a block. This block stores a certain number of transactions. Then the block is encrypted and gets a hash code. In the cash book you could provide each page with such a code.

This hash code becomes part of the next block and is written to the next page of the book. This chains the blocks. The result is a block chain, a block chain.

The special feature of Blockchains: they exist in thousands of copies at the same time. A computer program, a consensus algorithm, determines which postings are written in which block. As a result, all copies are completely identical. Any manipulation would therefore attract attention. That’s what makes Blockchains so secure.

Blockchain technologies are a non-manipulatable system for securing and transmitting information. Austria plays a pioneering role in sovereign bond issues throughout Europe.

According to Bitcoin, Ether, the cryptocurrency of Ethereum Blockchain, is number two in the crypto market.

The Ethereum Blockchain is characterized by being able to do more than just referral. It can also run small programs, called smart contracts or decentralized apps.

“Blockchain technology is an economic policy focus for us, and with the establishment of the FinTech Advisory Council in the Ministry of Finance, we are developing strategies to help Austria make the best possible use of these developments,” said Finance Minister Hartwig Löger (ÖVP) in the release.

Unadulterated data
“Blockchain technology offers great potential for increasing efficiency and ensuring the quality of bank processes,” says OeKB board member Angelika Sommer-Hemetsberger. The goal is to log the authenticity of data with a so-called Blockchain-Notarisierungsdienst.

“This added security contributes to a high level of confidence in the auction process of Austrian government bonds and strengthens Austria’s good standing in the market, which can also indirectly contribute to favorable financing costs,” said OeBFA CEO Markus Stix.

For next Tuesday, the increase of two Bunds is planned, one until 2023 and a current issue until 2028, the OeBFA announced on its homepage. The environment for the planned new debt has worsened slightly compared to September. Government bonds have generally come under pressure and interest rates have increased slightly.

For example, an average negative yield of -0.076 percent was achieved for the 0.00 percent German government bond with maturity until 2023 when topping it at the beginning of June. At the moment, the paper is returning positive territory with 0.03 percent in the secondary market.

The yield on the 10-year 0.75-percent Bund was at the beginning of September at the last increase at 0.534 percent rose in the meantime on the secondary market to 0.70 percent.

OeBFA has already completed around 80 percent of its financing plan for 2018. The planned financing volume was reduced in July by 2 billion to 25 to 28 billion euros. Including the October date, three auction dates are planned this year.


source :

https://www.kleinezeitung.at/wirtschaft/5502515/115-Milliarden-Euro_BundesanleihenAuktion_Oesterreich-setzt-auf  ( Sep 27, 2018)

Seng Mangan
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