Sberbank and MTS issue first Russian bonds on NSD’s blockchain platform
16 May 2018 Moscow
Image: Shutterstock
MTS and Sberbank CIB have issued their first Russian bonds on the National Settlement Depository’s (NSDs) blockchain platform.
The commercial bonds have been denominated in rubles with the full life cycle of a security in the form of a set of contracts, from placement to the full performance of the issuer’s obligations to investors.
To process the transactions, NSD has provided its own blockchain platform based on Hyperledger Fabric 1.1.
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 ($11.9 million).
As part of the transaction preparation, NSD implemented a full delivery versus payment (DVP) settlement model based on blockchain allowing it to transfer securities and funds simultaneously.
NSD 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.
To perform a transaction, the issuer, the central security depository, and an investor were granted access to the decentralised platform.
The system processes only digitised assets, making the process of placing, circulating, and record keeping securities transparent.
Each party to the transaction can exchange documents online and follow the transaction status.
Settlements are conducted directly in the record keeping system, which according to the NSD, accelerates the process of concluding the transaction.
The selected cryptographic protection scheme let all operations be conducted electronically using the signatures of the Moscow Exchange Group’s clients.
Eddie Astanin, chairman of the executive board at NSD, said: “NSD was one of first Russian companies which were interested in blockchain. In Q1 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.”
He added: “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.”
The commercial bonds have been denominated in rubles with the full life cycle of a security in the form of a set of contracts, from placement to the full performance of the issuer’s obligations to investors.
To process the transactions, NSD has provided its own blockchain platform based on Hyperledger Fabric 1.1.
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 ($11.9 million).
As part of the transaction preparation, NSD implemented a full delivery versus payment (DVP) settlement model based on blockchain allowing it to transfer securities and funds simultaneously.
NSD 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.
To perform a transaction, the issuer, the central security depository, and an investor were granted access to the decentralised platform.
The system processes only digitised assets, making the process of placing, circulating, and record keeping securities transparent.
Each party to the transaction can exchange documents online and follow the transaction status.
Settlements are conducted directly in the record keeping system, which according to the NSD, accelerates the process of concluding the transaction.
The selected cryptographic protection scheme let all operations be conducted electronically using the signatures of the Moscow Exchange Group’s clients.
Eddie Astanin, chairman of the executive board at NSD, said: “NSD was one of first Russian companies which were interested in blockchain. In Q1 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.”
He added: “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.”
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