Raiffeisen Bank’s Russian branch uses blockchain to issue first electronic mortgage

In an interesting development, Raiffeisen Bank's Russian branch has for the first time issued an electronic mortgage using a decentralized depositary system (DDS) on the blockchain platform Masterchane on Monday, according to reports by the local media outlet Kommersant. The document containing all the details about the parties involved in the transaction, the credit loans, and the property purchased was published in a decentralized depository system (DDS). The DDS is based on MasterChane—a Russian blockchain network for transferring valuable data via blockchain is being developed jointly by the largest banks within the Fintech association under the auspices of the Central Bank since 2016. The transfer of depositary operations by e-mortgages to the block system increases the security of data storage, reduces the time of the transaction and reduces the operating costs of depositories. “The system is essentially a software add-on on the basis of a master-machine that implements the end-to-end business process between depositories of accounting and storage,” said Yuri Kirilchev, Business Development Director of ITS Te-Teko (technical developer of DSD). The whole process works in a very safe and secure way. The transaction starts when the customer completes the electronic form fields. Then the document is certified with a strengthened qualified electronic signature, supplemented with other certified documents for the transaction and sent as an XML file to Rosreestr. There, the mortgage is checked and registered, after which the channel sends the file to the depository of storage (in this case - Raiffeisenbank). The storage depository node receives the file and sends it to the file storage. This creates a mortgage token. According to Andrey Popov, director of the IT department for Raiffeisen Russia, "The use of blockchain technology ensures maximum safety of data on electronic mortgages. The process of registering a transaction is greatly simplified, the time of its execution is reduced, and the risks of lack of collateral are minimized.” The development of this process has been hampered by the fact that Rosreestr is not yet connected to the MasterChane platform, but negotiations are on to connect the state regulator to the blockchain platform. According to Kommerssant, two other Russian banks are also considering to issue e-mortgages by the end of 2018. As BC Focus reported earlier, a large number of Russian banks are ready to work with cryptocurrencies but since there is a lack of regulation in the country they cannot provide services. A roundtable conference was recently held in the Moscow Stock Exchange to solely discuss the future of financial markets and cryptocurrency regulations. See Also: Top Russian banks ready to work with cryptocurrencies Russian Central Bank: might return to cryptocurrency payments sometime in the future Image via Shutterstock Join our Telegram group