Russia’s newfound love for blockchain technology and cryptocurrencies has been one of the most exciting developments in the industry this year. While the government continues to clarify the crypto laws applicable in the land, a private firm is marking a significant milestone with the technology.
Cutting Time and Inefficiencies
Last week, VTB, the second-largest bank in Russia, completed a new blockchain-based bank guarantee for MTS, Russia’s largest mobile cellular network carrier. The announcement explained that VTB had issued a contract to fulfill about 392 million rubles ($5 million) in payment obligations.
VTB explained that the guarantee was hosted on Masterchain, an Ethereum-based blockchain with backing from the Bank of Russia. The commercial bank and the network carrier completed the transaction in real-time, with VTB issuing the digital guarantee with a qualified official’s signature. Then, MTC accepted it and notified the bank.
Pointing out the benefits of the blockchain, Cadim Kulik, the Deputy President and Chairman of VTB’s board, explained that the technology helped both partners cut paperwork and time in completing the transaction. He added that blockchain also reduced the risk of possible fraud.
Russian Banks Flock to the Blockchain
VTB is the third major bank in Russia to incorporate blockchain into its operations in one way or the other. In September, Sberbank Switzerland AG, the Swiss subsidiary of banking giant Sberbank, announced that it had signed an agreement with Swiss trade finance platform Komgo to utilize its blockchain-powered trade finance service.
The announcement explained that the partnership was to help improve trade finance digitization. With commodity trading being a strategic business aspect for Sberbank Switzerland, the bank is looking into expanding its efficiency in the field.
Evgeny Kravchenko, Global Head of Trade Finance at Sberbank and Sberbank Switzerland’s Board Chairman, said:
“In recent years, trade finance digitalization has accelerated dramatically, following the needs of market players. We strongly believe that our customers will truly appreciate the enhanced efficiency of their operations due to Komgo’s convenient and high-tech solutions.”
Also, industry news outlets reported earlier this month that Alfa-Bank,one of Russia’s top banks, was looking into using blockchain in its service for freelancers. The reports explained that Alfa-Bank plans to use blockchain-based applications to automate its service for freelancers.
The platform will be based on the Waves Enterprise blockchain, and it will cover the registration and remuneration processes for these freelancers. Processes include income registration, payments settlement, and tax settlements.
Igor Kuzmichev, chief commercial officer at the Waves Enterprise, explained that the service would focus on the self-employed, including taxi drivers, cleaners, tutors, and more. It will provide integration with any bank, ensuring that users can get payments from wherever.