Bank of Russia Aspires to Put Mortgage Issuance on Blockchain
Russia’s central bank is considering putting mortgage records on Masterchain – a government-backed distribute ledger project now in testing with leading banks. The State Duma, the Bank of Russia’s first deputy chief, Olga Skorobogatove, said in a statement that earlier launched test on a decentralized depository system for digital mortgage bonds proved successful.
“We suggested to the government that we refine the project to the point when all kinds of transactions needed for the digital mortgage issuance can be done on Masterchain,” Skorobogatova stated in a statement. “This platform is working, and, without further ado, we can complete this development.” The official further stated six Russian banks have been examining Masterchain for exchanging digital letters of credit, “and some others are willing to join.” Skorobogatova didn’t specify the banks in that effort or entities that might partake in the digital mortgage pilot.
Masterchain was launched in 2017 by the Fintech Association, which is managed by the Bank of Russia. The project involves Sberbank, Alfa Bank, VTB, Raiffeisenbank Russia and Otkritie, the National Settlement Depository, and the federal land registry service Skorobogatova stated in a statement. The project was earlier probed as “disappointing” by the blockchain expert of Sberbank, Russia’s largest retail bank.
Skorobogatova stated the Bank of Russia’s regulatory sandbox for distributed ledger projects has applications from 50 projects in the pipeline, some of which have already finished pilots.
“We tested two digital assets projects, one for hybrid tokens representing digital rights and goods, and another for tokenization of services,” she said in a statement. “Both projects got a green light from us, and the companies are now waiting for regulation to be passed so they can launch in Russia.”
Again, the projects were not identified. Nevertheless, one might be the metal tokenization project by Nornickel, Russia’s mining and smelting giant, which was reported as successfully trialed in the regulator’s sandbox in February. In the meantime, the Duma is planning to hear a bill for the first regulation of digital assets in Russia. The draft passed the first hearing (out of the three required) last May and has been left intact until last week when the second draft was introduced with a package of other laws.
The new package is offering a procedure for publishing registered digital securities on the blockchain in Russia while forbidding any operations with cryptocurrencies utilizing Russia-based servers and web domains. Cryptocurrencies are considered commodities in the draft and should be reported for tax purposes. Nonetheless, they won’t be permitted to be legally sold for fiat. The draft fully reflects the stance of the Bank of Russia, which favors blockchain security but does not consider crypto should be legal in the country.