Yesterday Russian bank VTB said it issued a digital bank guarantee on the Masterchain blockchain, which is in production. Masterchain is an Ethereum blockchain variant that uses Russian cryptography, was co-developed by the Bank of Russia and commercial banks, and is operated by the FinTech Association. The guarantee for 392 million rubles ($5.4 million) was issued in favor of MTS PJSC, the digital, medial and telecoms firm.
The FinTech Association was keen to highlight that the digital guarantee is legally binding without the need for a paper document.
“This makes it possible to speed up the process of obtaining guarantees by the beneficiary and to reduce paperwork,” said Vadim Kulik, VTB Deputy President and Chairman of the Management Board. “In addition, placing data in a distributed ledger eliminates the risks of fraud with bank guarantees.” In other words, the beneficiary can verify that the guarantee is legitimate.
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