- VTB has revealed about offering a digital guarantee to Russian major cellular network provider
- VTB has issued a digital bank guarantee to MTS
- The integration of blockchain technology has allowed the bank to speed up processes like receiving and issuing
- Observing the blockchain adoption, it seems like the Russian banks are being attracted towards blockchain technology
Last Wednesday, VTB, the second-largest bank of Russia, announced that the bank will now offer a blockchain-enabled bank guarantee to the nation’s major cellular network providers. As part of development, it is found that the bank will issue a guarantee to MTS for the fulfilment of payment obligations, which is worth 392 million Russian rubles ($5 million). The bank also revealed that the commercial operation would be implemented on Masterchain, a Russian blockchain platform.
VTB issued digital bank guarantee to MTS
The VTB has issued a digital guarantee, the transaction of which was processed in real-time. It is found that the digital guarantee was signed with a reinforced qualified signature. However, the Russian cellular giant accepted the document and sent a corresponding notification to VTB. According to Alexander Smirnov, the Director of Corporate Finance and Treasury MTS, the solution presented by MTS can safely perform operations with VTB’s digital bank guarantees simultaneously with several participants both as beneficiary and a principal.
The new integration could allow the bank to speed up the process
According to Vadim Kilik, the deputy president and chairman of the VTB management board, the new integration of the blockchain system can help the bank speed up the process, by reducing paperwork. The integration can also eliminate the risk of fraud that is associated with the bank.
Smirnov also explained that the account guarantees in the network Masterchain would allow the firm to secure data about all issued bank guarantees in a single system. However, securing data in a single system can significantly increase the speed of issuing and receiving, with low operating cost, and increasing competition between participating banks.
Russian banks seem to be interested in blockchain technology
VTB introduced the integration of blockchain technology, where several Russian banks were yet exploring the technology. It seems like VTB took the first-mover advantage to integrate blockchain technology and to offer digital guarantees, as it was observed that several other banks were actively exploring the technology. This month, Alpha bank, one of the largest Russian commercial banks, revealed its blockchain-backed project for automating the freelancer’s services. And back in September, the largest bank of Russia, Sberbank, also joined a blockchain platform to offer commodity trading through its Swiss subsidiary.
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