Institutional trading over the blockchain made some progress this Friday. In an announcement posted on the Moscow Exchange website, Russia’s central securities depository, the National Settlement Despository (NSD), announced the completion of a commercial bond transaction between Sberbank and MTS – Russia’s largest mobile operator.
“NSD has already implemented a few successful cases based on blockchain, including the first IPO in the Bank of Russia’s regulatory sandbox, as well as the joint issuance of securities with the largest financial market players,” said Eddie Astanin, Chairman of the Executive Board, NSD. “We see that the technology is in demand. It has some advantages, and we will proactively develop it by creating infrastructure to record digital assets.”
Sberbank’s corporate investment division was the purchaser and organizer of the bonds. The Russian bank announced that it was purchasing commercial bonds over the blockchain back in May of this year. Friday’s statement from the NDS indicates that they were valued at RUB 750 million ($11.32 million).
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It was the NSD that provided the blockchain technology which supported the deal. The securities depository used a system based on Hyperledger Fabric 1.1 – a blockchain system developed in part by The Linux Foundation – a non-profit based in San Francisco.
From the time that the bond was issued until its redemption this Friday, all parties – Sberbank, the NDS and MTS – were granted access to the blockchain. Security and legal features were also integrated into the system to ensure it complied with Russian law.
“Blockchain may change the world the way Internet changed it,” said Andrei Shemetov, Vice President, Head of the Global Markets Department of Sberbank. “This technology is very important for the banking sector, because it allows for a cost reduction, a dramatic increase in the speed and safety of transactions, and provides an unprecedented level of trust and transparency in any transactions. I am sure that our joint blockchain project with NSD and MTS is just the beginning.”