The National Settlement Depository allowed the parties to use its blockchain platform – based on Hyperledger Fabric 1.1 – to conduct the transaction.
Sberbank CIB, the corporate and investment banking business of Sberbank Rossii PAO (MCX:SBER), and Russian telecoms expert MTS, as well as the National Settlement Depository (NSD) have placed commercial rouble-denominated bonds using smart contracts.
Sberbank said that 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 billion and has a maturity of six months, was organized by Sberbank CIB.
Before the transaction, a complete delivery-versus-payment settlement model was created using blockchain, which allows securities and money to be transferred simultaneously. The option to dynamically change the list of participants was added to secure work with a variety of investors. As a result, a complete securities lifecycle was carried out in using blockchain-based smart contracts – from placement to the issuer’s performance of its obligations to investors, including settlement in Russian roubles.
The issuer, the central depository and the investor received access to the decentralised platform to carry out the transaction.
The bond placement, circulation and record keeping process is highly transparent as the system only operates using digitalized assets, the bank explained in its announcement. Each participant can exchange documents online and track the status of the transaction. Settlements are carried out in the ledger system, which considerably speeds up the transaction. The cryptographic protection scheme allows all operations to be carried out electronically using the electronic signatures held by clients of Moscow Exchange Group. The source code of the smart contracts can be found on Github and is publically available in compliance with the Hyperledger project, in which Sberbank and the Moscow Exchange Group have participated since 2016.
This is not the first time when Sberbank ventures into a blockchain project. In November last year, Sberbank’s First Deputy Chairman of the Executive Board. Lev A. Khasis told TASS that the bank is cooperating with the Russian Federal Antimonopoly Service (FAS) on a distributed ledger technology (DLT) project.
Back then, Mr Khasis said that the practical implementation is delayed due to unsolved matters such as the slow interaction of blockchain participants. He forecast, however, that DLT solutions will be able to compete with traditional ones not earlier than in two or three years. He also mentioned that the bank was working on a number of blockchain projects.
In January this year, Sberbank announced the establishment of a blockchain laboratory. The laboratory will test blockchain technologies and will develop blockchain-based solutions. It will also aim to create product prototypes, carry out pilot projects, and implement applied business solutions for Sberbank.
The blockchain laboratory will interact with Sberbank’s other laboratories and will offer its competencies to other market participants through cooperation with start-ups, associations, communities, and alliances. In terms of marketing, the laboratory aims to popularize blockchain and to provide assistance in the preparation of educational programs in this area.