The solution dramatically reduces the time, costs and complexity entailed in novation – the conversion of a debt into a debenture – by automating key processes and reducing the risk of counterfeiting by means of blockchain-powered smart contracts.
Major metals companies must simultaneously deal with a large number of contractors. A company’s treasury service is one of the divisions involved in operational cash flow management, interacting with other market participants.
Often, situations arise when a treasury service offers contractors conversion of a debt emerging from a sales or rent deal into a debenture. This is called novation and is governed by article 818 of Russia’s civil code.
Currently, novation involves the issuance of a paper contract. Meanwhile, paper document flow entails the following issues:
Implementation of the system’s business logic by blockchain-based smart contracts facilitates substantially reduced transaction processing costs, ensuring full transparency and confidentiality of transactions.