Moscow Credit Bank (MCB) has announced the first-ever blockchain-based bank guarantee denominated in Chinese currency, amounting to over 100 million yuan (approximately $144,600). The guarantee was issued via the Masterchain blockchain platform and the Russian national blockchain network, which facilitates digital asset transfers between its participants. However, this marks a significant milestone for the country’s blockchain sector.
One of the main advantages of using an on-chain transaction is that the recipient does not need to wait for a physical document or make additional requests to their bank to verify its authenticity. In addition, bank guarantees can be used in international trade transactions as a financial security mechanism; they involve a contractual agreement between a lending institution that assumes responsibility if the customer fails to fulfill their obligations. This guarantee assures all parties involved that payment will be made and goods delivered as promised.
The Masterchain blockchain platform displays a ready-made bank guarantee approved by three parties. According to the bank, this guarantee cannot be faked or lost, and payments will be made in Chinese currency (Yuan).
“Many foreign trade contracts are serviced in Chinese currency, and the demand for payments in yuan is growing. This new decision will benefit large groups of companies regularly using multiple bank guarantees in large quantities.”
Natalya Bahova, Director of MCB’s International and Structured Finance Department.
Bahova also believes that this trend will only become more common in the near future.
On April 1, 2023, Russia’s central bank will launch its first consumer pilot for its digital currency (CBDC). The trial will involve 13 local banks and selected merchants conducting transactions with the digital ruble. This is part of an ongoing effort to further crypto developments in Russia and comes earlier than initially planned as a response to Western economic sanctions and a search for alternatives to the SWIFT system.
