The relation between Bitcoin and Russian authorities can be described as turbulent at best. While the Government, as well as the Central Bank of Russia, are not open to the use of Bitcoin or any other currency in their territory, they have a different outlook towards the underlying technology of bitcoin. The recent announcement by a group of Russian financial institutions to create a consortium to work on Blockchain technology is a standing proof of that.
The announcement, made during the XXV International Financial Congress held in St. Petersburg, has some of the major financial and tech companies working together on the digital currency technology. The list of companies that are going to be part of the blockchain consortium includes the likes of QIWI Group(NASDAQ:QIWI), BINBANK,MDM Bank, Bank Otkritie(FRA:9NOA), Tinkoff Bank and Accenture (NYSE:ACN). It is speculated that Accenture, being the only technology company in the current list, will be in the forefront when it comes to the development and deployment of the blockchain technology in the Russian banking and financial sector.
The consortium of Russian banks for blockchain technology is expected to be structured similar to the international consortium of banking and financial institutions for the development of blockchain technology. The international consortium is led by a New York-based fintech firm, R3CEV and has over 50 leading banking and financial institutions from across the world joining forces to explore the potential uses of blockchain technology in their industry. R3CEV has already developed a custom distributed financial ledger called Corda and is currently experimenting with applications built over Corda.
One of the main aims of the R3CEV-led consortium is to create a blockchain based network connecting participating banks for fund transfer applications. The intention behind this blockchain network is to enable the banks to provide a cheaper and swifter alternative to the SWIFT inter-bank fund transfer network.
The Russian Blockchain Consortium will be working along the same lines as R3CEV by engaging themselves in jointly developing and testing prototypes, sharing information about the projects with each other and standardizing to meet international requirements. Following the announcement, the members of the consortium will start the development and testing phase later this year.
According to Bank Otkritie, one of the participants in the project — the collaboration between major players will help the country’s financial institutions to develop and test new approaches to banking, like joint settlements, simplified customer identification procedures, and more. A representative from the institution has also hinted the involvement of the Russian financial regulator in the process.
With the foundation laid for a collaborative effort between the Russian financial and banking institutions, the adoption of Blockchain technology in Russia has come to a step closer to reality. We can soon expect more banks from Russia and CIS states to join the consortium to benefit from the digital currency technology.