Russia’s Biggest Bank Pilots Money Transfer on an IBM Blockchain

Sberbank has piloted the Russian banking industry’s first ever payment transaction over a blockchain.

Sberbank, Russia’s biggest bank by assets, has executed a real-time money transfer over an IBM-built blockchain based on the Hyperledger Fabric – a blockchain software. The transaction involved a money transfer of an unknown sum between a payer and a receiver in two separate banks, facilitated by Sberbank’s IT systems complete with a web application for the bank’s client to track the transfer.

As reported by CCN in July, the Linux Foundation-led open-source Hyperledger blockchain consortium formally released its first production-ready blockchain software in the Hyperledger Fabric 1.0.

“The blockchain solution created by Sberbank has allowed us to make the first pilot payment transaction – using IBM Blockchain technology – in the history of the Russian banking industry,” Sberbank’s managing director Stella Kudachkina said.

Sberbank also listed a number of participating partners involved in the pilot payment transaction, hinting at a future of blockchain payments for retail banking customers. They include MegaFon, Russia’s second-largest mobile phone operator; MegaLabs, a Moscow-based IT solutions provider; Alfa-Bank, a major Russian private bank and; technology giant IBM.

Notably, Sberbank and Alfa-Bank hosted the blockchain’s nodes with the ultimate aim to “serve as the primary scenario for developing a new settlement function” between the two banks.

The Sberbank executive added:

The advantage of using this technology when performing settlements is the high speed at which transfers are made: after the money is sent the transaction is recorded on the receiver’s account almost instantly, in real time, unlike the traditional system that is used to make transfers.

Sberbank’s announcement comes within months of the bank joining the Enterprise Ethereum Alliance (EEA), a consortium of companies, startups and governments working to leverage open-source Ethereum blockchain technology for enterprise solutions.

Earlier this year, the bank’s chief executive Herman Gref – notably a bitcoiner – claimed that Russia will see commercial applications of blockchain technology by 2019.

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