Russian Raiffeisen Bank Issues Digital Mortgage On Masterchain Blockchain
A Russian subsidiary of Raiffeisen Bank has tested a decentralized depository system (DDS) on blockchain Masterchain to issue an electronic mortgage for the first time ever in the Russian Federation, local media Kommersant reports.
An electronic mortgage is a document in an xml format which includes all the information about the transaction between the creditor and the borrower, comprising the name of the contract, the number, the place of the contract, and other additional information.
Russian financial institutions have been conducting the DDS development on the Masterchain blockchain platform for two years, which represents a network for transferring of information among participants involved in financial processes.
The very process of concluding a contract begins at the moment when the client fills in the electronic mortgage fields. After that the transaction is certified with an electronic signature and sent to the Federal Service for State Registration, Cadastre and Cartography (Rosreestr), where everything is scrupulously supervised. The service registers the file and sends it to the storage in Raiffeisenbank, where a document token is created on blockchain.
The use of DDS will significantly reduce the operating costs of depositories, since the entire system will be automated, according to Anna Zaitseva, CEO of DK Region, who took on the role of a custodian.
The application of blockchain in data transfer via electronic mortgages contributes to the safety of the transaction, reduces the time for settlement, decreases costs, and minimizes risks. Nevertheless, blockchain technology can’t be applied in the whole marketplace until the State Registration Service deploys it.
As previously reported, the Central Bank of Russia will actively introduce blockchain technology along with other innovative solutions.