The National Settlement Depository (NSD), the Russian central securities depository (CSD), has completed testing on its blockchain e-proxy voting technology.
NSD has been working with DSX technologies on the projects, and the prototype is based on the NXT distributed cryptographic platform, using the ISO 20022 international messaging standard.
The technology uses the distributed ledger technology to submit instructions for corporate actions, making information available to all members of the chain at the same time. The distributed database contains a full history of updates, and once data is entered it cannot be edited, meaning it should be impossible to taper with.
It is also designed to make information easily traceable, and to ensure optimum integrity at every point of the voting process.
Regulators and auditors can also access all necessary information by becoming members of the network.
Securities holders vote using digital signatures, and once votes are entered in to the blockchain, they are issued with identification numbers for their votes. Once votes are passed to the CSD, the system calculates the results, and NSD publishes them on the blockchain.
The system then keeps a record of any changes made throughout the voting procedure, and stores the results.
Eddie Astanin, chairman of the executive board at NSD, said: "Over the past 10 years, the global financial infrastructure has faced the challenges that make us review the approaches to reliability, security and performance of information systems. It is obvious for us that ignoring the rapid development of fintech and upgrading the out-dated platforms could hinder the stable development of the Russian financial system.”
“Fortunately, Russian specialists are among the most experienced in the global fintech industry, and we have proven this fact by implementing a fully functional prototype of e-proxy voting system based on blockchain. After testing blockchain for bondholder meetings, we can extend the use of this technology to other business areas of NSD."
During the testing period, the working group achieved a submission speed of 80 voting instructions per second, and according to Sergey Putyatinskiy, IT director at NSD, the CSD is now working to improve capacity and to enable support for more voting types.
Putyatinskiy said: “Our next step would be to subject our new prototype to legal and cryptographic expert evaluation, which will give us a more definite idea whether the prototype is suited for real voting."
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