Earlier in 2016, the Bank of Russia has introduced Masterchain, an Ethereum-based blockchain prototype created specifically to serve the interests of financial market actors. Alfa Bank, along with Sberbank, Qiwi, Banks Tinkoff and Otkritie, was one of the contributors to this newly developed and tested platform.
The bank provided the participants of the deal with special facilities through its Alfa-Business Online electronic system. Using this system the customer applies for the opening of the letter of credit, and the contractor then submits all necessary documentation upon finalizing of service delivery to the bank. Once the application for opening the letter of credit has been submitted, funds can be withdrawn from the customer’s account and first transferred to a special transition account and later to the contractor’s account.
Opening and closing of the letter of credit have been performed as transactions deploying smart contracts using the Ethereum platform, and were registered in the distributed ledger. Records in the distributed ledger contain a hash of the following information: deal’s identification codes, type of services, and terms and conditions. This allows for all participants of the deal to check its status at any time.
S7 Airlines is a technologically advanced airline on the Russian air transportation market. By conducting the deal, the company has tested the efficiency of smart contracts and realized how this technology could help optimizing business processes and improving the effectiveness of document flow. S7 Airlines plans to continue cooperation with Alfa Bank in this respect.
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