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Sberbank, NSD and MTS close deal on commercial bond issue using blockchain

23.11.18

  • The corporate and investment banking business of Sberbank has carried out redemption of the nominal cost of MTS’s RUB 750 mln commercial bonds.
  • A complete security deal using smart contracts – from issue to full execution of the issuer’s obligations to the investor – was successfully carried out.
  • The NSD allowed the parties to use its blockchain platform – based on Hyperledger Fabric 1.1 – to carry out the transaction.

 

23 November 2018, Moscow – Sberbank, the National Settlement Depository (NSD) and MTS have summed up results of the deal to issue commercial bonds using blockchain. The nominal cost of MTS’s RUB 750 mln commercial bonds, organised and purchased by the corporate and investment banking business of Sberbank, was redeemed. A security deal using smart contracts – from issue to full execution of issuer’s obligations to the investor – was successfully carried out. 

Commercial bonds are privately-traded unsecured fixed income securities that are placed on the OTC market through a private subscription. Prior to the transaction, a complete delivery versus payment settlement model was created using blockchain, which allows securities and money to be transferred simultaneously. The option to dynamically change the list of participants was added to work with a wide range of investors, and the latest version of Hyperledger Fabric was used.

The NSD allowed the parties to use its blockchain platform – based on Hyperledger Fabric 1.1 – to carry out the transaction. The issuer, NSD and investor had access to the decentralised platform to carry out the deal. During the project, the confidentiality of work with accounts was provided, and special aspects of Russian law were taken into account.

Vice President and Head of the Global Markets Department of Sberbank Andrey Shemetov:

“Blockchain can change the world just as much as the internet. This technology is very important to the banking sector as it allows expenses to be reduced, significantly increases the speed and security of transactions and provides an unprecedented level of trust and transparency for all transactions. I’m sure that our joint blockchain project with the NSD and MTS is just the beginning, and products and services using blockchain, including smart contracts, will become commonplace in the future.”

Chairman of the Executive Board of the National Settlement Depository Eddie Astanin:

“The NSD has already implemented several successful cases using blockchain, including the first ICO in Central Bank’s sandbox and issue of securities with the largest players of the financial market. We see demand for the technology and its benefits and will actively develop it by creating infrastructure to record digital assets. The existence of this infrastructure is an essential condition for bringing institutional investors to the market and securing both dynamic growth and increased capitalisation.”