Raiffeisenbank, MegaFon and National Settlement Depository perform the first-in-Russia rouble bond issue via blockchain

Raiffeisenbank has become the first in Russia organiser and subscriber of RUB 500 million bond issue based on the blockchain technology. The settlement platform for the issue of bonds of a leading Russian mobile operator MegaFon was provided by the National Settlement Depository (NSD).

The use of the blockchain technology made the deal unique for the Russian market. The deal structure provides that access to the decentralised platform is allowed for the issuer, the central depository, and the investor.

The development of the platform for bond deals started in the first quarter of 2017. The project ensured confidential treatment of data related to bond balance and included the requirements of Russian laws.
The system works only with digitised assets, which makes the process of bond placement, circulation and accounting simple and transparent. Every participant in the deal is able to exchange documents and track the deal status online. Cryptographic protection and verification allows to make all transactions electronically, which saves time, reduces costs for every deal participant, makes it possible to register/sign documents online and avoid possible errors in signing documents.

Gevork Vermishyan, CFO of MegaFon: «Following the last week issue of exchange bonds at a record-low rate, we were the first in Russia and among the first in the world to issue commercial bonds based on blockchain rights. This deal demonstrates MegaFon’s aspiration to prove it’s leadership in the development of digital economy in Russia. We see a high potential in the blockchain architecture, which is gradually and confidently becoming a new standard in the exchange of transaction data replacing traditional systems. We are happy to make first steps on the way to digital transformation of the securities market together with the NSD and Raiffeisenbank. I would like to thank the joint team that has successfully completed this breakthrough project.»

«This landmark deal is the first and very important step in testing a wide range of possible blockchain applications on the Russian securities market,» says Andrey Popov, Raiffeisenbank’s Board member, head of IT Directorate. «Despite vigorous development of the blockchain technology, the legislative base in this sphere is at its early stage in Russia. Successful completion of this deal will make it possible to form a new legal environment, which will encompass all similar future projects on the Russian securities market.»

«The NSD was among the first in Russia to develop the blockchain technology. For us, the main criterion for transition from modelling to industrial solutions is interest in this technology on the part of clients and partners. MegaFon and Raiffeisenbank have demonstrated an innovative approach, responsiveness, and a high technological level, which is very important for implementing advanced practices,» says Eddy Astanin, CEO of the National Settlement Depository.

The bond issue was approved by the Board of Directors of MegaFon on the 28th of August. On September 20, the NSD assigned an identification number to the issue, which will be redeemed on 22 December 2017.