Blockchain Tech

Russia’s first commercial bond transaction using blockchain announced

May 19, 2018

author:

Russia’s first commercial bond transaction using blockchain announced

MTS, the leading Russian telecommunications operator and digital service provider, has placed commercial bonds in the amount of RUB 750 mln using blockchain smart contracts, making it the first transaction of its kind in Russia.

According to the official statement,  MTS had placed commercial bonds of 750 million rubles ($12.11 million), with the primary buyer being Sberbank, using a proprietary blockchain platform provided by the National Settlement Depository (NSD) and based on Hyperledger Fabric 1.1.

“The transaction was executed via DVP (Delivery versus payment) settlement assuming simultaneous movement of securities and money using blockchain, the immutable ledger for recording transactions. The framework of the transaction was structured to include the possibility of a dynamic change in the composition of network participants in order to potentially open the issue to a wide range of investors”.

Andrey Kamensky, Vice President, Finance, Investments and M&A, MTS, noted that MTS continuously tests and implements new technologies across a variety of business areas, including corporate finance.

“Today, with the participation of our partners, we have successfully executed the first commercial bond issue in Russia using smart contracts based on blockchain throughout the entire settlement chain – from security placement and cash receipt to fulfillment of all obligations to the investor. MTS intends to continue employing blockchain-based solutions, primarily in financial markets, due to its clear advantages in increasing transaction transparency and the participants’ confidence, while substantially reducing transaction costs.”

Igor Bulantsev, Senior Vice President, Sberbank CIB added that the issuance of MTS bonds allowed the bank to confirm the reliability, efficiency and security of the platform based on blockchain.

“The pioneering transaction with Sberbank and MTS confirmed blockchain’s status as an efficient industrial technology providing confidentiality and speed during securities settlement,” said Eddi Astanin, Chairman of the Board, National Settlement Depository.

Let us remind, that in October 2017 NSD, the central depository for Russia’s largest securities exchange group, announced trials of its Hyperledger-based commercial bond trading platform.