Russian second largest bank VTB has stated that it had disbursed a digital bank guarantee using Masterchain blockchain, which is basically a modified version of Ethereum blockchain that utilizes Russian cryptography.
The Masterchain blockchain was jointly developed by commercial banks and the Bank of Russia.
It is run by FinTech Association. The bank guarantee worth RUB 392 million ($5.40 million) was disbursed in the interest of MTS PJSC, the digital, medial and telecoms firm.
The FinTech Association further underlined that the digital guarantee is lawfully enforceable without a requisite for physical document.
Vadim Kulik, VTB Deputy President and Chairman of the Management Board, stated “This makes it possible to speed up the process of obtaining guarantees by the beneficiary and to reduce paperwork. In addition, placing data in a distributed ledger eliminates the risks of fraud with bank guarantees.”
The statement implies that beneficiary will be able to validate the legality of the guarantee.
In addition to VTB, other institutions on the platform that will have the ability to disburse guarantees include Gazprom Neft, PSB, Ak Bars, Alfa-Bank and Raiffeisenbank. Each member will maintain a node and secure the network.
Tatiana Zharkova, General Director of the FinTech Association, stated “In the future, insurance and logistics companies will be able to connect to the system. We see significant interest in the service and plan to develop the Masterchain platform to work with other types of trade finance transactions.”
A year before, FinTech Association revealed its aim to establish a digital mortgage platform utilizing Masterchain. Earlier this year, the central bank of Russia stated that it is looking at the prospects of backing a distributed registry for digital mortgages stored on Masterchain.
In this regard, the Federal Service for State Registration (Rosreestr), which retains registries related to real estate in Russia, also took part in talks.
