The technology involved in blockchain has been adapted for many different industries and has especially benefited the banking industry in multiple countries around the world. It’s enabled them to support their customers with better products and services, but a recent transaction worth billions of dollars has proven how lucrative blockchain can be.
Sberbank, which is the biggest bank in Russia, recently performed a $12 billion transaction, which was done with the inclusion of a smart contract made possible by blockchain technology. The transaction took place on May 16th, 2018, and the bank used this information to settle the transaction with the use of roubles. The bank released the following statement:
“Sberbank CIB, the corporate investment banking business of Sberbank, MTS, a leading Russian telecoms operator, and the National Settlement Depository (NSD) have placed commercial rouble-denominated bonds using smart contracts.”
The biggest benefit of using a smart contract is transparency. The entire process, including the bond placement and circulation of funds, is tracked through the smart contract. Each part involved in any transaction can use the contact to exchange documents and other files, while keeping track of the current status of the transaction. To improve speed on this type of settlement, all transactions are dictated on a ledger system.
During the multi-billion-dollar transaction, the smart contract followed through with a securities lifestyle, which allowed the bank to maintain confidentiality and transparency at the same time. The entire transaction followed local Russian laws to make it possible. In a statement by the Senior Vice President of Sberbank, he commented:
“Sberbank is the leader in terms of introducing high-tech and digital innovation in Russia’s financial sector. This MTS bond issue not only allowed us to confirm the reliability and secure nature of the blockchain platform and carry out complex structured transactions involving securities, but also demonstrated the potential that this technology has to develop in Russia’s digital economy.”
This isn’t the first time that the banking industry of Russia has involved the use of blockchain and cryptocurrencies. In fact, the Active Citizen platform in Moscow created and released a voting system that employs the Ethereum platform. The system lets the country’s citizens vote for a variety of city proposals. Blockchain has also provided the opportunity to open two cryptocurrency agencies, which are in Vladivostok and advised by Vitalik Buterin.