The Central Bank of Russia (CBR) said earlier this week it has collaborated with the biggest banks in the country to develop Masterchain, a distributed ledger-based technical prototype for financial messaging. The first test transactions using the technology have already been executed.
The Masterchain is a networking tool for market participants using the distributed ledger technology. It allows prompt confirmation of data actuality with respect to a customer and a transaction as well as fast creation of various financial opportunities for the market participants to provide game-changing products and services to their customers. The technology allows for faster communication between counterparties and confidence in financial transactions.
According to the Russian central bank, Masterchain was the next step towards exploring and developing new advanced technologies for the local financial market.
“The creation of prototypes and joint inquiry of applicabilities help both the regulator, and the market participants understand outcomes, estimate capacities, mitigate the risks of using different technologies, and decide on follow-up actions,” said Olga Skorobogatova, deputy governor of the CBR. “This is a good groundwork for onward progress. We would suggest that the Masterchain will be under way under the auspices of Consortium for fintech development being launched by the Bank of Russia,” she noted, adding that the Masterchain prototype could be used in the future as a component of the new-generation financial infrastructure.
Distributed ledger technology is a sort of database used for record keeping. It is designed to prevent cyber attacks on financial transactions. This type of technology is in the base of blockchain, the technology that underlies Bitcoin digital currency.