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Monday, April 22, 2019

BANK OF MOSCOW - RUSSIA: VTB patents a multi-issuer blockchain system

Bank of Moscow - Russia issued the following announcement on Jan. 23.

VTB has obtained a patent for a multi-issuer payment system based on blockchain technology. The patent covers the core functions and structure of the system. This is the first case of a bank patenting its intellectual property.

Using this technology, VTB will develop digital products, services and payment instruments to account for financial settlements between an almost unlimited number of system participants. Services include fast payment systems, cross-border payments and loyalty programmes. The services can be used by individuals and legal entities, including other banks. The multi-issuer system has the potential to reduce costs and increase the efficiency of business processes for all participants.

The prototype for the use of this technology was the bank’s Digital Settlement Service, a tool for p2p transfers based on blockchain. The distributed registry provides storage of unchanged data on customer accounts balance and banks’ mutual requirements, which in turn are used for clearing and settlements. Smart contracts took over the functions of the payment system, and the speed of operations were only limited by the performance of blockchain. The payments do not involve the use of cryptocurrencies and are made in fiat currency, which is the ruble.

“The investments being made by VTB in IT development are becoming far more strategic. Previously, they helped to solve internal problems whereas now they are aimed at creating high-tech systems. Patenting this innovation is a significant step towards the development of the bank’s digital ecosystem and an important milestone in the market. A global race to patent a number of technologies is underway. The world's leading banks have already accumulated more than a dozen patents related to the use of blockchain. In the Russian market, the practice of protecting intellectual property in financial and near-financial technologies is only recently emerging. We will continue to invest in and develop this area and urge our peers in the industry to do the same,” said Olga Dergunova, Deputy President and Chairman of VTB Bank Management Board.

Original source can be found here.

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