Sberbank, the state-owned Russian banking, and financial services company conducted Russia’s first commercial bond transaction using blockchain technology. MTS announced that it placed commercial bonds of 750 million rubles using a blockchain platform. The National Settlement Depository (NSD) provided the platform and it is based on Hyperledger 1.1.
A complete securities lifecycle was a success using smart contracts and the latest version of Hyperledger Fabric. The bank revealed the source code for the smart contracts is on Github and is in compliance with the Hyperledger project.
The bonds issued attain maturity in 182 days or in six months and placed on an OTC market. The transaction used a delivery versus payment method created using blockchain which allows simultaneous transfer of securities and money. This method allowed for confidential operations of accounts and is in line with Russian law.
What The MTS Bond Issue Achieves
Igor Bulantser, Head of Sberbank CIB commented that the bond issue allows the bank confirm the reliability, efficiency and secure nature of blockchain platform. Mr. Igor claims that the bond issue also demonstrated the potential of blockchain technology in developing Russia’s digital economy.
Andrey Kamensky, Vice President of MTS for Finance, Investment, and M&A express satisfaction with the success of the project. He added, “MTS will continue using blockchain, […] because it increases transparency, is trusted by market participants and helps optimize costs.”
Eddie Astanin, Chairman of the Executive Board of NSD comments that the deal with Sberbank and MTS is proof that “blockchain is a mass-use technology that offers confidentiality and speed” when handling securities.