Central Bank of Russia is preparing legislative changes to allow use of blockchain technology in transactions.

Izvestia reports that the new capacity will enable transaction parties to use digital letters of credit and smart contracts, which will substantially speed up the process of transaction and decrease banks’ expenditure by 20% at the average, the Russian FinTech Association says.

Central Bank estimates that digital letters of credit will reduce the average term of deal completion down to 8 days as compared to 18 days it takes now and significantly decrease the expenditure and risk. One of the main amendments to the Regulation on transfer of funds is the permission for transaction parties to use digital letters of credit and smart contracts.

The former are expected to appear on Masterchain platform this year and in 2019 the technology will become available for wide use.

The updated version of the regulation puts stronger emphasis on the requirements for e-documents: it will be possible to not only email them, but also exchange them via distributed electronic systems. Experts believe it will give a substantial increase to transparency of the transaction for all parties.

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