Russia’s National Settlement Depository (NSD) has announced the details of the country’s first transaction issuing commercial bonds based on the blockchain technology.

The transaction was supported by MegaFon and Raiffeisenbank. Earlier in October, NSD teamed up with MegaFon and Raiffeisenbank for the issuance and initial placement of the blockchain-based commercial bonds on the Russian market.

According to the details, the RUB 500 million commercial bond issue of MegaFon was paid off at par value on 22 December, 2017. Raiffeisenbank was the organizer and buyer of the bond issue. The transaction was carried out on NSD’s platform.

NSD said that a full life cycle of the blockchain-based security was implemented successfully – from placement to the full execution of the issuer’s obligations to the investor.

“The issuance of MegaFon commercial bonds via NSD’s blockchain platform was a revolutionary event in the industry and attracted the interest of Russian issuers and our international partners in the post-trade sector. We demonstrated that blockchain is able to serve as an industrial solution on the financial market,” Eddie Astanin, Chairman of the Executive Board, NSD, said.

The system’s designed allowed an issuer, a CSD, and an investor to receive access to a decentralized platform. It helped solve the issue of ensuring confidentiality when working with data on securities balances and also took Russian legal specifics into account.

According to the official release, the system works only with digitalized assets, making the process for placing, circulating, and record keeping for securities as transparent as possible. It allows each participant to exchange documents online and monitor the process of making the transaction. In addition, cryptographic protection and verification allow all operations to be conducted electronically.