Sberbank and telco MTS have implemented the first Russian issue of commercial bonds via smart contracts utilising a blockchain platform developed by National Settlement Depository.
Sberbank CIB was the organiser and main buyer of the issue of MTS bonds with a 6-month maturity term for a total sum of RUB 750 million.
Igor Bulantsev, head of Sberbank CIB, says: “ 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.”
As part of the transaction, NSD implemented a full Delivery versus Payment (DVP) settlement model based on blockchain allowing it to transfer securities and funds simultaneously. The depository added an option to change the composition of network participants to work with a wider circle of investors, and updated the system to the newest version - Hyperledger Fabric.
Each party to the transaction can exchange documents online and follow the transactions’ status - from placing securities and receiving funds to the full execution of the issuer’s obligations to investors.
Eddie Astanin, NSD chairman, says: "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. Our final task is to create digital asset accounting infrastructure together with market leaders; the existence of the infrastructure is a crucial condition for institutional investors to enter our market and for the market’s successful development and increase in its capitalisation.”