Ethereum Blockchain To Help Austria Rise From Debt
However, the development will boost the uptake of blockchain technology.
Boost for Cryptos As Austria Deploys Ethereum Network To Offer Bonds
Austria is grappling with a rising national debt. As a remedy, the government now plans to raise about €1.15 billion by Tuesday next week through an auction of bonds. The securities will be traded and verified through the ethereum blockchain, a move aimed to enhance effectiveness.
Austria’s finance head, Hartwig Löger stated that blockchain plays a key role in Austria’s economy. He pointed out that the European nation is looking for ways it can gain maximum benefits from blockchain. The Fintech Council was formed to oversee this goal. Under the new plan to raise funds, Austria will issue two bonds, both maturing after five and ten years respectively. The latter is expected to return 0.78% in interest.
The Treasury has contracted OeKB to offer the bond. The issue will not be a token sale. The current debt will be highlighted on the blockchain and cannot be exchanged. This development hints at a tokenization future.
Impact On Cryptocurrency Adoption
The move by the Austrian government is good news for cryptos. The publicity means that the technology might be adopted quickly than imagined. Generally, Austria is a conservative country and the deployment of the ethereum network opens the door for other jurisdictions. This will probably propel the demand open ledgers.
Additionally, the thorny issue of regulation seems to be addressed. It brings clarification on tokenized assets. Lack of clear regulations has been a major hindrance towards the mainstream adoption of cryptos. If the regulation side is sorted out, more parties are expected to come on board since conditions will be favourable.
Austria joins other countries to offer bonds through an open blockchain. In May, Sberbank from Russia offered securities through the Hypeledge system.
It is not clear how the bond issue will turn out considering that the ethereum blockchain will be used. No bond has been issued using ethereum blockchain, which is mostly used by bureaucratic financial systems. The outcome might spur the adoption of blockchain on a wider scale.