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Home Latest News Blockchain Russia’s second largest bank VTB pilots bank guarantees on blockchain

Russia’s second largest bank VTB pilots bank guarantees on blockchain

VTB, the second largest bank in Russia after Sberbank, has piloted a new blockchain-based system in order to issue bank guarantees.

According to an official announcement on Dec. 16, VTB provided a blockchain-enabled bank guarantee to the country’s biggest mobile cellular network provider, MTS.

According to Cointelegraph, as part of the development, the bank issued MTS a guarantee for the fulfillment of payment obligations worth 392 million rubles, or $5 million.

The parties completed the transaction in real time, with VTB issuing a digital guarantee signed with a reinforced qualified signature. Then MTS accepted the document, sending a corresponding notification to the bank.

Vadim Kulik, deputy president and chairman of the VTB management board, stated that the new integration allowed the bank to speed up the process of issuance guarantees and notably reduced paperwork. He also noted that blockchain deployment eliminates the risks of fraud associated with bank guarantees.

Alexander Smirnov, director of corporate finance at MTS, highlighted that the Masterchain-based bank guarantees system will also reduce operational costs and increase competition among participating banks.

Introduced back in 2016, Masterchain is known as the first blockchain platform certified in Russia, using local cryptographic data protection methods. The platform was developed by the Russian Fintech Association alongside the Bank of Russia and major financial players, such as Sberbank, Alfa Bank, Tinkoff Bank, and Qiwi.

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