Russia's Central Bank to Study Blockchain Tech

The Bank of Russia has set up a working group to investigate potential applications of blockchain technology within finance.

Feb 29, 2016 at 1:57 p.m. UTC
Updated Sep 11, 2021 at 12:09 p.m. UTC

The Bank of Russia has announced plans to "analyse and evaluate" potential applications of blockchain technology within finance.

The country's central bank revealed on Sunday it had established a working group that will provide analysis of "advanced technologies and innovations in the financial market", with the goal being to study distributed ledger technologies, as well as developments in mobile, payments and other areas.

The news comes at a time when certain public entities in Russia are supporting a possible ban on monetary surrogates, a classification that includes digital currencies. Officials from groups including Russia's Ministry of Finance, the government agency overseeing financial policy; members of the state duma, one of the country's legislatures; and its Investigative Committee, which investigates criminal offenses, have all previously voiced concerns about the technology.

Russia's central bank, by contrast, has been more positive about the technology, issuing more measured statements as far back as 2014.

Olga Skorobogatov, the Bank of Russia's Deputy Chairman, and the leader of the new group, said in a statement:

"The development of modern financial market[s] is inseparable from the development of financial technology."

Financial services is quickly digitising, and new business models, ecosystems and market participants are "changing the behavior of consumers of financial services", Skorobogatov added.

The working group plans to hold regular meetings with representatives of banks, self-regulatory organisations and other financial market participants to discuss the use of new financial technologies.

The Bank of Russia's head, Elvira Nabiullina, earlier this month announced that the bank was "closely monitoring" blockchain technology with the aim of "developing its own approach to financial innovation".

Growing user base

Sunday's announcement also comes hot on the heels of a report from Russia's official news agency Tass last week, which claimed that the country ranks fifth for number of cryptocurrency users globally.

Users of bitcoin and other cryptocurrencies now number 200,000, with only the US, China and Germany having higher numbers, said deputy chairman of the Russian State Duma committee for security and anti-corruption, Andrei Lugovoi [Ed –his figures actually making Russia fourth, not fifth].

Lugovoi noted that, while the central bank had previously held a somewhat negative stance towards cryptocurrencies, it was now in favour of a "careful approach to bitcoin, and saw a serious economic potential" in the technology.

The Ministry of Finance, on the other hand, has made a number of statements condemning bitcoin, though it has conceded the potential use case for blockchains in finance.

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