A bank in Russia has utilized blockchain to make a digital bank guarantee denominated in Chinese yuan. The financial institution noted the advantages of this approach, as well as the increasing demand for payments in the Chinese currency.
MKB Uses Masterchain Platform to Facilitate Bank Guarantee in Yuan
Moscow Credit Bank (MKB) issued the following statement. The bank has made Russia’s first digital bank guarantee for an amount exceeding 100 million Chinese yuan, using blockchain technology — the Masterchain Platform developed by the Central Bank of Russia.
In RBC quoted a press release Crypto, MKB explained that the guarantee is denominated in the currency to which the importer’s contracts are linked. In In the event of payment under it, the supplier receives Russian The exchange rate at which rubles are converted is agreed by both parties.
The Bank guarantee was signed by three parties: the principal bank, the guarantor bank and the beneficiary. The touted advantage of using a digital document, which ostensibly cannot be forged or lost, is that the beneficiary doesn’t need to wait for the paper version or request a confirmation from the bank about the authenticity of the guarantee.
“This is the first digital bank guarantee in the market, which was issued in yuan, through the Masterchain system. Most foreign trade contracts are serviced in Chinese currency, and the demand for payments in yuan is only growing,” commented Natalya Bahova, director of MKB’s International Structured Finance Department.
The executive added this to your profile “logical step” and that it’s likely to see more such examples in the future. “The decision will be especially relevant for large groups of companies which have many subsidiaries that accept bank guarantees in large quantities and on a regular basis,” Bahova elaborated.
Russian The report stated that banks guarantee authenticity is verified by companies spending around 900,000,000 rubles each year. This amounts to almost $12 million. And Even so, around 0.5% of them ultimately turn out to have been fakes. Related The risk of a disaster has been estimated at 75 billion rubles
Amid Sanctions imposed by the West Its invasion of Ukraine, Russia has been exploring ways to reduce dependence on the U.S. dollars and the traditional financial system. This includes the use of fiat currencies, crypto payments, and blockchain technologies to circumvent restrictions.
A law “On Digital Financial Assets” went into force in January, 2021, as well as the last year, officials Moscow We have been working to expand regulatory coverage to include decentralized cryptocurrencies such as bitcoin.
In It is best to start early DecemberA company licensed by Bank This is Russia announced the country’s first authorized digital asset transaction involving a foreign currency, China’s yuan. The Two countries have also created digital versions for their fiat currencies.
Do you think there will be more applications of crypto technologies and other currencies in Russia? Share your thoughts in the comments below.
