Russia’s Sberbank, Interros Group Complete Foreign Exchange Repo Deal Using Blockchain
State-owned Russian bank Sberbank and investment firm Interros Group have successfully completed an over-the-counter OTC foreign exchange repurchase agreement (repo) transaction using blockchain technology.
The transaction was conducted on an IT platform developed by the Blockchain Laboratory and the Sberbank global markets department. The Hyperledger Fabric-based platform, which is utilizing smart contract and electronic digital signatures, allows users to implement a complete end-to-end process for entering into and supporting OTC repo transactions.
Andrei Shemetov, Vice President and Head of the Global Markets Department of Sberbank, told Reuters that the transaction is real, legally binding, and has been concluded in electronic format. While he did not disclose the volume of the transaction, he indicated that its amount corresponds to the average volume of an inter-dealer repo transaction.
“The transaction is a currency repo on the security of Eurobonds of a Russian issuer of the first echelon,” said Shemetov. “In the future, the conclusion of transactions through the blockchain platform will reduce transaction costs and errors through automation, as well as increase transparency and trust among all participants in the financial market.”
Olga Zinovyeva, First Deputy General Director, Deputy Chairman of the Board of Interros, said that they consider the business in the digital economy one of the priority directions of development.
“Digital transformation is an indisputable trend worldwide,” said Zinovyeva “We are pleased that we have taken the first step towards a digital future in partnership with the leader of the Russian banking sector, Sberbank.”
Last month, Sberbank CEO Herman Gref said that blockchain has moved to the stage of industrial development and predicted that mass adoption of the technology will begin in one to two years.
“For now, this is all research and experiments. We have not put blockchain solutions into commercial operation yet,” Gref said at the time. “Moreover, I see that we are not yet ready for this, there are a large number of technological problems associated with the immaturity of technology. It will also take time, to fully implement it. The hype around the technology has passed, it has moved to the stage of industrial development. The technology will take a year or two to be applied on an industrial scale.”
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