The Russians have a connection! Before you drop your Martini (agitated, unmixed) in shock, then relax because it is only Sberbank, NSD and MTS to close an agreement on a commercial bond loan using blockchain.
As reported in May, the Russian digital service and telephone service provider MTS placed the bonds through smart contracts, making it the "first transaction of this type" in the country.
For the transaction, the National Settlement Depository (NSD) has provided its proprietary blockchain platform based on Hyperledger Fabric 1.1. The primary buyer was Sberbank.
Now we have gone ahead and the trio says that Sberbank's corporate and investment banking business has repaid the nominal cost of MTS 750 million RUBs ($ 12.1 million) of commercial bonds.
Andrey Shemetov, VP and head of the global markets department at Sberbank, says: "Blockchain can change the world as much as the Internet. This technology is very important for the banking sector as it reduces expenses, significantly increases the speed and security of transactions and offers an unprecedented level of trust and transparency for all transactions ".
Eddie Astanin, chairman of the board of directors of NSD, adds: "The NSD has already implemented several successful cases using blockchain, including the first ICO in the central bank sandbox and the issue of securities with major players of the financial market We see the demand for technology and its benefits and we will actively develop it by creating an infrastructure to record digital resources ".
According to the companies, a comprehensive security agreement with smart contracts – from issuance to full execution of the obligations of the issuer towards the investor – has been "executed successfully".
Commercial bonds are unsecured fixed-income securities listed on the stock exchange that are placed on the OTC market through a private subscription.
Prior to the transaction, a complete delivery and payment settlement model was created using a blockchain, which allows securities and money to be transferred simultaneously.
The issuer, the NSD and the investor have had access to the decentralized platform to complete the agreement. During the project the confidentiality of the work with the accounts was provided and special aspects of Russian law were taken into consideration.