Russia’s Central Bank to Test Blockchain Messaging System

Russia’s Central Bank is testing Blockchain technology with selected partner banks via a new consortium – but it will not involve the previously-touted “Russian Bitcoin.”

Also read: Time for Russia ‘To Ban Bans’ Says Putin Business Advisor

Russia’s Central Bank Tests ‘Cryptotechnology’

At the International Finance Congress June 3-4 in St. Petersburg, deputy governor Olga Skorobogatova said that a new “consortium” was to be set up “for the implementation of this promising Blockchain cryptotechnology.”

“Currently a number of major banks as well as several companies have confirmed participation in the consortium,” she stated. “We’ve created a technical prototype for a messaging system on the Blockchain and will be testing this with market participants shortly.”

Russia has thus far been an outspoken critic of Bitcoin in particular, stating that it would develop its own centralized “equivalent” whose issuance would be controlled by the bank.

Blockchain technology itself has meanwhile fared better, with Russia seeking to streamline banking procedures and create gateways to international finance in line with institutions throughout the world.

Skorobogatova added that the messaging system would likely first be used with ISO, SWIFT and other formats, with the potential for blockchain-based payments coming “as a possible next step,” local news source Kommersant notes.

Russia R3-CEV Competition?

Participants in the consortium have been named among others as QIWI, the mobile payment company already investigating the use of cryptocurrency-like tokens, online bank Tinkoff and the Russian arm of consultancy firm Accenture. Notably, Sberbank and VTB Group, the country’s largest banks, did not sign up, the former planning to join in the R3-CEV consortium.

“Blockchain allows for long-standing problems in the finance sector to be resolved, as well as changing the setup for all sorts of relationships between market players,” QIWI CEO Sergey Solonin commented.

His comments were echoed by fellow participants Binbank and KMB-Otkritiya, both of which were careful not to suggest a seismic shift in practices was on the cards as yet.

“We’re currently evaluating and choosing where to go in terms of work,” Binbank’s head of digital Dmitriy Kashtanov said. “One of the most promising areas is registers [but also] transfers, as well as working with smart contracts.”

KMB’s Sergey Mendov added there were “several areas in which the technology could be implemented” but that the bank was “concentrating at first on the simplest cases.”

The Central Bank already has a “work group” looking at Blockchain and its potential areas of implementation, which has been active since February. In the meantime, the outlook for unregulated technologies such as Bitcoin from a legal perspective remains decidedly bleak.

What do you think about the latest strategy of Russia regarding Blockchain implementation? Let us know in the comments section below!

Images courtesy of rbc.ru and brics-info.org

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