Russia’s Largest Bank Accomplished the First Blockchain Commercial Bond Transaction
Great news for Russia. The Sberbank CIB branch investment bank has successfully accomplished the country’s first blockchain-based “commercial bond transaction”.
The announcement was made on 16th May through the Sberbank‘s website. To successfully complete this transaction, the financial institution has collaborated with MTS, one of the nation’s telecom operators and the National Settlement Depository (NSD). The blockchain-based transaction was operated on Hyperledger Fabric 1.1, provided by NSD.
“The NSD allowed the parties to use its blockchain platform — based on Hyperledger Fabric 1.1 — to carry out the transaction. The MTS bond issue, which is worth RUB 750 bln and has a maturity of six months, was organized by Sberbank CIB,” stated the Press Release.
Commercial bonds are “unsecured fixed-income securities issued by a company and placed on an over-the-counter (OTC) market through a private subscription.” In order to complete the transaction, a delivery-payment model based on the blockchain tech was designed, which led to the elimination of the long waiting process.
All parties involved have had access to the platform at the same time, thus ensuring the transparency of the information, an aspect that has to match with the legislation of Russia. They were able to modify and transfer information in real time.
Igor Bulantsev, Senior Vice President of Sberbank and Head of Sberbank CIB, stated:
“This MTS bond issue not only allowed us to confirm the reliability, efficiency and secure nature of the blockchain platform and carry out complex structured transactions involving securities but also demonstrated the potential that this technology has to develop Russia’s digital economy.”
Eddie Astanin, Chairman of the Executive Board of the NSD, has stated about their collaboration with Russian bank that:
“The NSD was one of the first organizations in Russia to adopt blockchain. We began working on a prototype platform for carrying out bond transactions in Q1 2017. The deal with Sberbank and MTS was the first of its kind, and shows that blockchain is a mass-use technology that provides confidentiality and speed when working with securities.”
He added that NSD is pursuing the development of an ecosystem for the digital asset market and engaging in new partnerships with crypto leaders.