Sberbank, a state-owned Russian banking and financial services company with its headquarters in Moscow, has deployed a pilot of the first ever payment transaction to take place through a blockchain-based system. The bank, which has several operations in European and ex-Soviet era countries, is seeking to incorporate blockchain as part of its operations sooner than later.
Sberbank is considered to be one of the largest banks in the country of Russia, as it holds a large portfolio of assets. It has partnered with IBM and others such as MegaFon, a big competitor in the Russian telecommunications industry, MegaLabs, an Internet Technology services provider based in Moscow, and Alfa-Bank, another significant bank based in Putin’s Russia. They’ve all worked together to conduct this transfer of payment through the blockchain developed by IBM.
This particular blockchain technology was built using Hyperledger Fabric. Hyperledger Fabric was chosen because it serves as an open source platform for distributed ledger solutions, underpinned by a modular architecture delivering high degrees of confidentiality, resiliency, flexibility, and scalability. It is designed to support pluggable implementations of different components, and accommodate the complexity and intricacies that exist across the economic ecosystem. This flexibility is a potential reason as to why this was integrated.
The actual amount of money that was involved in the transaction between the bank the and recipient at another bank was not revealed. Sberbank utilized their own IT department and their own interfaces to follow the path of the transaction from the start of its journey to its final destination.
A representative from the Russian Financial Institution stated that:
“The blockchain solution created by Sberbank has allowed us to make the first pilot payment transaction – using IBM Blockchain technology – in the history of the Russian banking industry.”
The two banks worked together to host the nodes of the hyperledger fabric blockchain with the goal of being able to integrate this solution as the fundamental technology that will run their settlement process.
A statement by an executive of Sberbank noted the sort of benefits that this technology would bring. They said that a significant increase in speed and efficiency will take place with the completion of each transfer. The executive further went on to talk about the aspect of record-keeping and how the transaction is accounted for immediately. This is an improvement on the current way that the bank processes transactions.
Sberbank’s past relations with the blockchain
This is not the first time that the bank has progressed and taken action in the blockchain space. They have previously launched a blockchain project with a Russian government regulator, the Federal Antimonopoly Service of Russia. The prior project was more on the enablement of document exchange on the blockchain. The aim of the prior project was to study distributed document storage, an innovation that would make the process of document storage much quicker and more reliable. They found that the vital issue in that project was the elimination of intermediary communication providers when transferring documents. Yet another example of cutting down on personal and overall inefficiencies in the system.