VTB has tested a blockchain service to provide bank guarantees

Many Russian banks are showing interest in the blockchain industry. Sberbank leads the domestic market in launching services based on decentralised technology.

Russia’s second-largest bank, VTB, is also actively penetrating the blockchain industry. At the end of last week, it became known about successful tests of its Masterchain-based system.

This is a service for the provision of bank guarantees. MTS acted as the state bank’s counterparty in concluding the relevant agreement, the credit institution said in an official statement.

The service was launched on the basis of the Masterchain Bitcoin Investor network deployed on etherium. It was first introduced in Russia in 2016 and approved by the Russian Central Bank.

The software was developed by a team from the Fintech Association. During trials of the service, the state bank provided performance guarantees to MTS for a total of up to RUB 392 million (about $5 million).

The transaction was implemented in real time. After receiving the guarantee, MTS representatives sent a respective notice to the bank.

According to Vadim Kulik, deputy head of the state bank’s management board, the credit institution was able to significantly reduce its transaction costs by using the blockchain service. The time required to send and receive documents has been reduced, as all information is now transmitted exclusively in digital format.