Russia’s largest bank Sberbank and Trafigura Group Pte. Ltd of Singapore made a pilot blockchain transaction as part of a West Siberian oil sales deal during Russia’s Eastern Economic Forum on September 5, Sberbank said in a press release.
Sberbank purchased from Trafigura its accounts receivable of a major Turkish trader. Sberbank and Trafigura agreed on the financial terms of their deal and made a settlement that was tracked online step by step.
The experiment is an early foray into a technology that is popular with Russians. The idea is to put commodities onto a blockchain as due to their nature they are easily tradable and the price setting mechanisms are well established. However, the commodity markets that provide the platform for trading commodities are large and complex and the multiple layers and players incur costs. The idea of the blockchain is connect the purchaser of a unit of a commodity directly with the producer and so reduce costs and improve transparency and liquidity in the market.
This transaction was carried out on a platform created by the parties using the Hyperledger Fabric framework, with the transaction date, amount, timeframe, delivery scope and financial terms blockchain-encrypted.
The blockchain technology helped the parties cut their operating costs, documentation approval time and labour costs related to the transaction.
Alexander Vedyakhin, first deputy chairman of the executive board, Sberbank said: “We have carried out our…