Sberbank CIB, the investment arm of Russia’s largest bank, Sberbank, conducted the first blockchain-based commercial bond transaction in Russia, organizing the issue of MTS corporate bonds with 6-month maturity worth 750 million rubles (about $12 million). The operation was carried out on the blockchain platform provided by the National Settlement Depository (NSD), whose technology is based on HyperLedger Fabric 1.1. MTS is a leading telecommunications company based in Moscow.
Commercial bonds are unsecured debt securities that are placed on the over-the-counter market (OTC) via private subscription. To make the transaction possible, a full Delivery versus Payment settlement model was integrated on the blockchain platform, which allowed the movement of bonds and cash flows take place simultaneously.
For the transaction, three entities had access to the blockchain platform – the central depository, the issuer, and the investor. The project ensured confidentiality in dealing with accounts and considered all the nuances of Russian legislation.
Each entity taking part in the deal was able to exchange documents online and check the transactions’ status in real-time – from placing bonds and receiving cash to the full execution of the deal.
Igor Bulantsev, head of Sberbank CIB, commented:
“Issuing MTS bonds has not only allowed us to confirm the reliability, efficiency and safety of the blockchain-based platform for organizing and conducting complex structured securities transactions, but also demonstrated the great potential of the technology for the development of Russia’s digital economy.”
Eddie Astanin, chairman of National Settlement Depository, said:
“In the first quarter of 2017, NSD began developing the prototype of the platform to conduct bond transactions. The Sberbank and MTS transaction was the first one which gave blockchain the status of an industrial technology which ensured confidentiality and accelerated securities settlements.”
He added that the final goal was to develop a digital asset accounting ecosystem in collaboration with market leaders. The infrastructure is essential for market growth.
Last year, Sberbank launched a blockchain lab to carry out research and partner with startups and support blockchain adoption.
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