State-owned Russian banking entity Sberbank and Moscow-based private equity firm Interros Company have successfully completed a foreign exchange repurchase agreement with the use of blockchain technology, according to Reuters Russia.

Sberbank executive Andrei Shemetov notified Reuters the transaction was legally binding and was carried out with the help of smart contracts and digital signatures through the bank’s IT platform. Additional details about the transaction were not released, but Shemetov indicated it “corresponded to the average volume of the interdealer repo transaction.”   

Bullish On Blockchain Technology

A news release from Sberbank said the transaction was carried out with the Hyperledger Fabric platform, with the smart contract programmed in Go.

Shemetov believes using blockchain for repo transactions has several advantages over traditional solutions, and pointed out how

“In the future, concluding deals through the blockchain platform will cut operational costs and reduce mistakes due to automation, as well as will increase transparency and trust between all participants of the financial market.”

Interros First Deputy CEO Olga Zinovieva said the company is “glad that we have made the first step towards the digital future in partnership with Sberbank, the leader of the Russian banking segment.”

Industrial Blockchain Adoption

In mid-November, Sberbank CEO Herman Gref made headlines after a few of his remarks were picked up by Russian state news agency TASS. At the time, Gref noted the hype surrounding blockchain had passed and it was now at the industrial development stage. His opinion was it “will take a year or two to be applied on an industrial scale.”

The CEO has reportedly been bullish on blockchain’s commercial potential for a few years now. He has also been a notable supporter of cryptocurrency and has taken steps to stand in opposition to governmental crackdowns. However, he does not necessarily see a clear path forward for crypto in Russia due to the centralized role of the state.

He mused in October how cryptocurrencies do not have good prospects for the next decade because “it’s not likely that any state is ready to part with the centralized money supply model.”