Russia’s NSD tests blockchain-based e-proxy voting prototype

While the Bank of Russia is still exploring the pros and cons of blockchain, the distributed ledger technologies have won support from the National Settlement Depository (NSD), part of the Moscow Exchange group of companies.

NSD announces today that it has successfully finished developing and testing an e-proxy voting system running on a distributed ledger (blockchain technology). The prototype is based on the NXT distributed cryptographic platform, and uses ISO 20022 international standard for messaging. NSD has been collaborating with DSX Technologies on the project.

E-proxy voting is an innovative technology for corporate actions processing that provides for electronic interaction between securities holders and issuers for the purpose of exchanging information and documents. The new technology was introduced at NSD in August 2014.

Eddie Astanin, Chairman of the Executive Board at NSD, says:

“Over the past 10 years, the global financial infrastructure has faced the challenges that make us review the approaches to reliability, security and performance of information systems. It is obvious for us that ignoring the rapid development of FinTech and upgrading the outdated platforms could hinder the stable development of the Russian financial system. Fortunately, Russian specialists are among the most experienced in the global FinTech industry, and we have proven this fact by implementing a fully functional prototype of e-proxy voting system based on blockchain. After testing blockchain for bondholder meetings, we can extend the use of this technology to other business areas of NSD.”

The existing e-proxy voting solution enables cascade messaging through a chain of nominee accounts, from the issuer to the securities holder and back. NSD manages the database for the chain, ensuring that all voting instructions are properly submitted and accounted for. The blockchain-based e-proxy voting prototype enters the instructions into a distributed database which is accessible to all the members of the chain at the same time.

Sergey Putyatinskiy, IT Director at NSD, adds:

“Our next step would be to subject our new prototype to legal and cryptographic expert evaluation, which will give us a more definite idea whether the prototype is suited for real voting.”

For the full announcement from NSD on the use of the new technology, click here.

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