The Russian Association of Corporate Treasurers is joining the nation's central bank in trialing the government-run Masterchain blockchain platform, the group announced last week.
The association is testing Masterchain to facilitate communications within the national banking system, according to the Masterchain white paper. This would mark the latest move to use the platform to replace the SWIFT inter-bank communication network, a use case which was first discussed in April 2018.
The platform was created by the nation's FinTech Association in collaboration with Russia's 14 largest banks, including VTB.
According to the white paper, the system will include Russian banks and government agencies responsible for contract registration and market regulation. FinTech is claiming that switching to Masterchain in processing mortgage contracts will reduce operating costs up to five times and instead of days the transactions will take minutes.
The project also is expected to produce a KYC mechanism based on a digital identity so that banks will be able to share credit histories and information about fraud cases without breaking bank secrecy. The system is also going to deal with bank guarantees and letters of credits
However, as previously reported by CoinDesk, the ultimate goal for Masterchain is still to replace SWIFT. In particular, concerns that U.S. or European Union sanctions against Russia in 2014 might eventually remove the nation from the SWIFT system have spurred Russia's experimentation with alternate financial communication systems. Previous tests have shown issues with processing different document format.
Russian flag image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.