Sberbank, BC Region and NSD enter into repo deal using blockchain

Maria Nikolova

The deal had three parties: the seller – Sberbank, the buyer – BC Region, and the settlement agent – the NSD.

Russian bank Sberbank Rossii PAO (MCX:SBER) and Brokerage Company Region, along with the National Settlement Depository (NSD) have entered into a repo deal using blockchain technology.

The deal involved a RUB-denominated OTC repo secured by federal loan bonds (OFZs). From a legal point of view, the deal is governed by Russian law and is a binding financial contract that was signed electronically using a smart contract and e-signatures via the collateral management system (CMS) of the NSD.

The deal had three parties: the seller – Sberbank, the buyer – BC Region, and the settlement agent – the NSD. Interaction between the parties was fully automated and took place on a blockchain network. Each participant submitted an instruction to its node in the network, after which the smart contract concluded the deal and submitted settlement instructions to the NSD’s clearing system. The NSD’s CMS platform was used to carry our settlements, which allowed the participants of the repo deal to automate the execution of margins, settlement functions and repository reporting.

Alina Akchurina, Managing Director for Collateral Management Systems at the NSD, commented:

“Integrating the NSD’s CMS into distributed blockchain networks is part of our development strategy. Using blockchain to service repo deals is one of the few examples that justify the use of this technology. The combination of independent settlements carried out in smart contracts and the neutral position of the NSD as a collateral management agent create an extremely flexible and progressive mechanism for performing OTC deals. During this pilot deal, the NSD not only acted as the settlement depository, but also provided collateral management services to its participants, and supplied the market data used for the settlement of the smart contract.”

In November this year, Sberbank, NSD and MTS summed up the results of their deal to issue commercial bonds using blockchain. The nominal cost of MTS’s RUB 750 million commercial bonds, organised and purchased by the corporate and investment banking business of Sberbank, was redeemed. A security deal using smart contracts – from issue to full execution of issuer’s obligations to the investor – was successfully carried out.

Read this next

Digital Assets

Silvergate dismisses speculation of trouble, says BlockFi exposure is minimal

Crypto-friendly bank Silvergate Capital claimed on a Tuesday blog post that it had minimal exposure to crypto lender BlockFi, which filed for chapter 11 bankruptcy protection this week.

Retail FX

Fidelity launches crypto trading for retail investors

Fidelity Investments, one of the largest brokerages in the world, has officially rolled out a commission-free crypto trading product for retail investors, starting with zero-fee trading for Bitcoin and Ethereum.

Digital Assets

ECB head calls for tougher crypto regulation after FTX collapse

President of the European Central Bank, Christine Lagarde, has called on lawmakers to start working on fresh crypto regulations to protect the financial system after the collapse of the FTX exchange.

Retail FX

CySEC updates rules for regulated brokers’ cross border activity

As CySEC’s attitude of adopting more stringent licensing guidelines and operating regulations becomes ever clearer, certain aspects of the rules and operations start to come into sharper focus.

Market News

Outlook for Gold: Can the Precious Metal Regain Power?

Gold set an all-time high at $2070 on March 08, 2022, when the price skyrocketed amid investors’ worries about the military conflict in Eastern Europe.

Crypto Insider

2022 Islamic Finance recap: as the space continues to evolve, blockchain stands to play a big part

Despite the global economy being ravaged by turmoil induced by the Covid-19 pandemic over the last couple of years, the Islamic finance industry has emerged relatively unscathed

Crypto Insider

Decentralized Exchanges and Pooled Trading Platform Applications

Decentralized exchanges are one-way blockchain companies take back the power of value creation.

Crypto Insider

How to maximize the safety of your digital tokens?

Digitalization is the future of the investment world. These are the most preferred and growing investments in the world.

Institutional FX, Interviews

FIA EXPO 2022: Interview with Trading Technologies

The derivatives trading industry has gathered in Chicago to attend the FIA EXPO 2022 on 14-15 November. 

<