Blockchain adoption is the right direction for Russia to solve its current settlement problems, according to an executive at Russia’s largest bank, Sberbank.
Blockchain technology has matured in recent years to offer new capabilities that potentially allow Russia to create more efficient payment systems.said the first vice-president of Sberbank, Alexander Vedyakhin.
On March 14, Vedyakhin participated in the meeting of the Russian Federation Council in the budget and financial markets committee, highlighting the promising future of blockchain in Russia, local news agency Interfax reported.
According to Vedyakhin, Distributed Ledger Technology (DLT) is a great foundation for a new payment system due to its decentralized nature and privacy features. He claimed:
“Because it’s a distributed ledger, there’s no single decision-making point, no hub, no switch that can be turned off; everyone has records of everything, and there are special protocols that allow you to do this confidentially.”
Vedyakhin added that Sberbank is currently actively exploring the implementation of blockchain technology for payments. “We are confident that Sberbank and other central bank colleagues will find this solution,” he stated, expressing his confidence that blockchain will be more relevant in 2023. The Sberbank executive said:
“Next generation payment systems will be on the blockchain.”
In his speech, Vedyakhin also pointed out that the blockchain has evolved rapidly in recent years, and that developers have managed to find solutions to problems such as limited scalability and limited privacy. These blockchain issues have been resolved so far, he added.
According to Mark Smargon, CEO of the public permissionless ledger project Fuse Network, there is no technical reason preventing Russia from creating its own blockchain-based system.
“Significant adoption by major enterprises and their consumers is just around the corner thanks to recent advances in privacy and scaling technology, especially EVM-enabled systems, which have become the standard for experimentation” , Smargon said in a statement to Cointelegraph.
He noted that fully online real-time technology for cross-border payment settlement is “only a matter of time” as the technology has matured significantly in recent years. At the same time, Smargon questioned whether blockchain could allow economies to circumvent international sanctions:
“It needs to be clarified when this technology will be widely adopted and whether it will allow users to circumvent international sanctions. Blockchain allows for greater transparency and disintermediation is not just a solution for illicit activities.”
The news comes as Sberbank finalizes its Ethereum-based decentralized finance platform, which it plans to test in May 2023. Russia’s largest bank has also been working on an international settlement platform that would serve as an alternative to SWIFT. According to Sberbank CEO German Gref, the company plans to finish its setup in 2023.
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