The transaction was performed through the Masterchain blockchain platform, which is the Russian national blockchain network.
Moscow Credit Bank has issued a blockchain-based bank guarantee denominated in Chinese currency, claiming that the product is the first in the country. The bank guarantee exceeds 100 million Chinese yuan — or nearly $144,600 at the time of publication.
According to a statement, the transaction was conducted through the Masterchain blockchain platform, the Russian national blockchain network created to transfer digital assets between participants.
The financial institution said one advantage of performing the transaction on-chain was that “the beneficiary does not need to wait for the paper version and make a separate request to the bank to confirm the authenticity of the issued document.”
A bank guarantee is a financial safeguard offered by a lending institution. Through a contractual agreement, a bank agrees to assume financial responsibility for a specific transaction if the customer fails to fulfill its obligations. Bank guarantees are commonly used in international trade transactions to ensure that payment is made or goods are delivered as promised.
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On the Masterchain blockchain platform, a ready-made bank guarantee is displayed, which is agreed upon by three parties. “It cannot be faked or lost,” stated the bank. The yuan is the currency of the bank guarantee, as the importer’s contracts are pegged to Chinese currency. If a payment is made under the guarantee, the beneficiary will receive Russian rubles at the exchange rate agreed by the parties.
Natalya Bahova, director of the MCB’s International and Structured Finance Department, noted:
“Most foreign trade contracts are serviced in Chinese currency, and the demand for payments in yuan is only growing. This is a logical step for the market, we will see more examples of this in the near future. The decision will be especially relevant for large groups of companies that have many subsidiaries that accept bank guarantees in large quantities and on a regular basis.”
As part of the country’s ongoing crypto developments, Russia’s central bank is preparing to launch the first consumer pilot for its central bank digital currency (CBDC) on April 1, 2023. The digital ruble transactions will be conducted by 13 local banks and several merchants, Cointelegraph reported.
The CBDC pilot was initially scheduled for 2024 but was moved to an earlier date as the Russian central bank sought SWIFT alternatives in light of Western economic sanctions.