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:

• High labor costs of creation and execution control of debt obligations
• Risk of loss or counterfeiting of paper documents
• Low speed of operations involving paper documents

• An automated system based on the Waves Enterprise platform has been created. Unlike the current procedure of treasury services’ interaction with contractors, in which a paper debt bill is issued and transferred to a contractor, treasury employees can run a digital document flow in the system’s account for the conversion of contractors’ debts into debentures.
• The E-Loan system combines digital document flow, a distributed data storage registry and distributed transparent business logic executed by smart contracts.

• The system’s decentralized architecture facilitates transparency and reliability of mutual payments between participants, as well as fail safety for the entire system.
• All operations for debt novation into a debenture with subsequent digitalization and repayment are controlled by smart contracts that ensure the observance of all conditions written into them.

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.