Bank of Russia Official: Still Too Early to Gauge Blockchain’s Potential

May 28, 2018 at 13:00 UTC
Updated May 28, 2018 at 18:36 UTC
NEWS

A senior official at Russia’s central bank has argued that time is still needed to understand the full benefits of blockchain technology.

Speaking in a discussion at the annual SPIEF conference in St. Petersburg, Bank of Russia deputy governor Olga Skorobogatova said blockchain requires improvements in terms of security and scalability, adding that it is still “not mature.”

According to a report translated from Russian, she said:

“In the world, there is still no big industrial solution on distributed ledgers, except for bitcoins … This is mainly due not to the fact that the technology is not mature enough.”

Skorobogatova added that the lack of large-scale adoption is partly due to the fact that enterprise executives do not yet understand the value of the technology.

Still, there are two different areas in which the technology that might be of benefit, she argued, where one is well suited for online operations such as electronic letters of credit – she provided the examples of Ripple and R3’s Corda platform – and the other involves working offline and with smart contracts – Ethereum and Hyperledger were cited in this case.

But technology for technology’s sake is “pointless,” the offical continued, predicting that, this year, the world will come to a greater understanding of blockchain and can then come to better anticipate how the technology will be of use within industrial-scale applications.

Despite Skorobogatova’s comments, the Bank of Russia has already built a regulatory platform that aims to make sales of cryptographic tokens, or initial coin offerings (ICOs), more transparent and secure for traditional investors. Just last week, it was announced that the country’s National Settlement Depository and Sberbank CIB, the bank’s corporate and investment banking arm, would carry out a trial ICO issuance over the platform.

The central bank is also mulling the use its ethereum-based Masterchain software to communicate financial messaging across the Eurasian Economic Union, as per an April report.

Bank of Russia building image via Shutterstock