Sberbank obtains blockchain repo patent

Maria Nikolova

Via the new solution, the parties to a deal can register the terms of a repurchase agreement inside a self-executable decentralized environment.

Russian bank Sberbank Rossii PAO (MCX:SBER) has become the first in Russia to have obtained a patent for a repo deals solution and an execution system that utilize distributed ledger technology (DLT). The solution was developed solely by the bank.

With the brand new solution, the parties to a deal can register the terms of a repurchase agreement inside a self-executable decentralized environment, i.e. sign a smart contract. Then the parties will sign the smart contract with their e-signatures via a distributed ledger, while the contract will meet the terms of the first part of the repo deal by transferring funds and securities to the parties.

The market price of securities is being monitored and put on a distributed ledger over the entire lifetime of a deal. Picking up signals from an external source, a smart contract will make mutual payments to the parties and close the deal automatically.

The said system covers the entire end-to-end process, which eliminates the issues of reconciliation and controversies between the parties, thus reducing risks for the bank and making financing more affordable for clients.

Sberbank has been a keen proponent of new fintech solutions, including ones leveraging the capabilities of blockchain. In December 2018, for instance, Sberbank, Brokerage Company Region, and the National Settlement Depository (NSD) entered into a repo deal using blockchain technology. The deal involved a RUB-denominated OTC repo secured by federal loan bonds (OFZs).

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