VTB – 2nd-ranking bank across Russia following Sberbank – has reportedly carried out trials for a new blockchain-powered system supporting bank guarantees issuance. 

Specifically, VTB will be the provider of blockchain-based bank guarantee to a Russian top-tier mobile cellular network entity – MTS.

As included in the initiative, the bank will reportedly conduct the issuance for MTS, regarding a guarantee for the fulfillment of payment obligations, equivalent to 392 million rubles ($5 million). 

The implementation of Masterchain – an Ether-powered blockchain prototype supported by the Russian central bank – has been finalized to support the commercial operation. 

The parties reportedly finalized the transaction in a real-time manner, with VTB completing the digital guarantee issuance, signed with a reinforced qualified signature.

After that, MTS accepted the document, shooting a corresponding notification to the bank.

Vadim Kulik, deputy president and chairman of the VTB management board, reportedly claimed that the new integration will help the bank accelerate the issuance process, along with bringing down paperwork majorly.

Blockchain deployment further cancels out the possibilities for frauds, related to bank guarantees, to occur. 

Alexander Smirnov, director of corporate finance at MTS, reportedly highlighted that the Masterchain-powered bank guarantees solution will bring down operation costs and increase competition level among participating banks.