Recently, Austria took the initiative in the era of Blockchain technology world and became the first European country to issue a government bond. In order to manage the security, the Austrian government is auctioning off € 1.15 billion in bonds using Ethereum.
The Oesterreichische Kontrollbank(OeKB) issues bonds in behalf of the Federal Government Finance Agency(OeBFA). The OeKB stated that blockchain notarization service tests were quite successful with the help of tech team which is used for the first time as a part of the auction system or ADAS(Auction Procedure for federal Bonds of the Republic of Austria).
Managing Director of the ChainBerry GmbH, Karsten Mueller, who issued the first Blockchain stock fund, commented on the government bond issuance:
“But this [blockchain issuance] is only the beginning. Other regions of the world show the huge potential. For example, the World Bank, supported by the Commonwealth Bank of Australia, issued Bondi, the world’s first blockchain bond, at the end of August. And the fifth largest Chinese financial institution, the Bank of Communication, recently launched a blockchain-based and mortgage-backed bond,” said Müller.
As per Mueller’s opinion, the Chinese have already taken action prior to the Austrians.
“The way the bond was launched could have thwarted the financial crisis ten years ago. The problem ten years ago was mainly that a runaway US mortgage market had become completely disconnected from reality in the refinancing sector. And this was due to the complete lack of transparency of the markets on the basis of mortgages with partly questionable quality, bond structures were created across many levels and pushed into the investors’ accounts across the world. “Nobody knew about the origin of the mortgages underlying the paper,” stated Müller, “not even the rating agencies.”