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Blockchain Being Considered for Banks by Russian Central Bank

Last Updated March 4, 2021 4:47 PM
Samburaj Das
Last Updated March 4, 2021 4:47 PM

A report has revealed that Russia’s Central Bank is considering a blockchain, albeit not the Bitcoin blockchain, to be used among banks in Russia to store all transactions on a shared distributed ledger.

In a nod toward embracing blockchain technology, the Bank of Russia, the country’s central bank recently revealed the creation of a blockchain ‘working group’. The primary function of the working group is to evaluate and assess the potential real-world applications of the technology that underpins Bitcoin.

Now, a report in prominent Russian publication Izvestia  has cited sources close to the Central Bank in revealing that the regulator is considering the possibility of allowing Russian banks to store data of all their transactions on a blockchain.

The Central Bank is drawn toward the tamper-proof properties of a blockchain. Furthermore, it would be impossible to remove data from a distributed ledger, enabling a transparent system, according to the source.

An excerpt from Izvestia’s report read:

Therefore, the Central Bank is considering to give banks the right to use blockchain technology to store information about all their transactions.

Notably, the working group will present the results of its study of distributed ledger technology and will also reveal how the innovation can be applied in the real world.

There is a need to establish the feasibility of the fervor and enthusiasm surrounding distributed ledger technology among financial institutions, the report revealed. The source notes that if the applicability of the technology is not established before the end of 2016, banks will begin to lose interest in the innovation.

The publication also revealed that the Central Bank has not denied the claims of its source. Officials from the bank added that their official position on the matter will be revealed in time.

Russian Officials: Blockchain > Bitcoin

At a time when Bitcoin is being fast-tracked to being deemed illegal in Russia and Russian President Putin’s internet advisor has dismissed bitcoin’s acceptance around the world as ‘fiction’, Russian officials have adopted a markedly different stance with Bitcoin’s technology – blockchain.

Russia’s information minister has previously expressed his desire to explore the use of the technology “in the best interests of the (Russian) public”.

A new roadmap submitted to President Putin in December 2015 by the Internet Development Institute in Russia called for the ‘legalization’ of blockchain technology by January 2017.

Toward the end of 2015, Sberbank – Russia’s biggest bank, through its First Deputy Chairman, revealed that it was interested in joining the global private banking-blockchain consortium led by R3.

In quotes attributed to the Vice President of Sberbank last week, the executive opined that the spread and integration of distributed ledger technology might render banks obsolete altogether by 2026.

Featured image from Shutterstock.