Austria lends money with Ethereum!

Austrian government is auctioning more government bonds on 2nd October. For the first time, a blockchain solution is to be used: the technical core of the 1.12 billion euro auction is the Ethereum platform.

Austria is planning another auction round for Bunds next Tuesday, 2 October. So are to be sold bonds in the amount of 1.12 billion euros. The Ethereum Blockchain will be used for the auction for the first time.

The auction process relies on the proven software ADAS (Austrian Direct Auction System). The program developed by the Oesterreichische Kontrollbank (OeKB) has been in use since 1998. The software has evolved over the years and has been available to accredited institutions since 2008 as an online service. Now the program has found its way onto the Ethereum Blockchain. Software advertises at high speed for bidding and result announcement as well as with great transparency. The IT department of OeKB is responsible for the technical implementation.

The Austrian Federal Finance Agency OeBFA has commissioned the auction in the context of debt management.

Only approved “primary dealers” will participate in the auction. These are 21 banks, of which 16 are based abroad. The list also includes some representatives from Germany. In addition to the industry leader Deutsche Bank, Commerzbank and Landesbank Baden-Württemberg are among the approved institutions.

In fact, the primary dealers are obliged to participate in the auction of Bunds  In addition, they must actively participate in secondary market trading for German government bonds. Through their activities in the primary and secondary market for government bonds, the 21 institutions have to report to the Austrian state on a monthly basis

The bids must be made in increments of one million euros. They must also include the price the bidder is willing to pay. The minimum bid is calculated from the total issuing volume (1.12 billion euros), divided by the number of participating financial institutions.

Austria has been more likely to show blockchain and crypto-affine tendencies. For example, in the Alpine republic it is possible to buy Altcoins in post offices.

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