MOSCOW, February 12, 2018 /PRNewswire/ --
Under the project implemented jointly with the Agency for Housing Mortgage Lending (AHML) and Vnesheconombank, the Federal Service for State Registration, Cadastre and Cartography of the Russian Federation has used blockchain technology for the first time to register shared ownership agreements for construction. The blockchain solution is used for communication between the Federal Service and the Fund for the Protection of Rights of Individuals Participating in Shared Construction. The Vnesheconombank's Centre of blockchain competencies operated as the project's technological partner. The transactions show how to use distributed ledger technology in one of the most complicated areas of the housing market.
"Introducing blockchain technology into the registration of shared ownership agreements makes it possible to keep records of all stages of the process, which enables the monitoring of compliance with the procedures and deadlines and eliminates the risk of unauthorised data modification. In other words, if the construction investment process becomes more transparent, this will provide protection against the most common fraud schemes," Vladimir Demin, Advisor to the Vnesheconombank's Chairman, said.
The pilot project is under way in the Saint Petersburg region. Any contribution under the shared ownership agreements will be registered in the blockchain service and transferred into the Fund's accumulation account for the protection of investor rights.
Under the current legislation, developers of new properties pay 1.2% of the price of each shared ownership agreement as a contribution to the Fund for the Protection of Rights of Individuals Participating in Shared Construction. To register shared ownership agreements, the Federal Service must be informed by the Fund that developers have paid such amounts.
The use of blockchain technology for communication between the Fund and the Federal Service for State Registration, Cadastre and Cartography provides the project participants with access to up-to-date information on the registration of every shared ownership agreement. Additionally, this prevents the information management systems of the Federal Service and the Fund from being desynchronised, enables local data processing if the Federal Service and the Fund lose communication with each other and eliminates the risk of unauthorised data modification in the information management systems.