Russia’s Biggest Bank Wants To Adopt Blockchain. Not Bitcoin
Sberbank, the biggest bank in Russia might adopt blockchain technology in the future.
Sberbank, the biggest bank in Russia might adopt blockchain technology in the future. The bank plans to join the international consortium R3 and develop blockchain based services. However, as in the case of other international big banks, it doesn't plan to use Bitcoin.
“We cooperate with the consortium very closely and watch the direction of blockchain technology. We are studying the documentation and I can't rule out that we will enter. though there's no final decision yet,” said Lev Khasis, the bank’s deputy chairman for Russian daily Kommersant.
According to L. Khasis, although blockchain is the building base for Bitcoin payment network, Sberbank doesn't plan to use it. „As far as I know, the regulator's negative position haven't changed. blockchain, however, could be used for our internal settlements, transactions between our subsidiaries and other banks. It has nothing to do with cryptocurrencies, it's just another accountant method: simple, fast and reliable.“
"Another bank joining R3 does not excite me at all and it is irrelevant to consumers too. Banks will use the blockchain to save money in the back end with no saving or impact to the end consumer. It helps their bottom line. It may be faster, but it won't be more secure as they are missing out the most important part that makes a blockchain secure - a cryptocurrency like Bitcoin,“ Simon Dixon, CEO BnkToTheFuture.com and Fund Manager of Bitcoin Capital told to CT.
“Bitcoin is the most secure blockchain, as it rewards its miners (auditors) with newly created Bitcoin. Without external miners (auditors) being incentivized to verify transaction there is little security improvement. We are more passionate about investing in technology that makes banks less significant, than blockchains that make it cheaper for banks to commit more crime as they are not using the most secure and transparent blockchain - Bitcoin. The Russian regulators will realize this eventually, but in the meantime Bitcoin works without banks."
According to S. Dixon “allowing the blockchain and banning Bitcoin is like allowing people to sell food but making it illegal to eat it. Firstly, it's not going to work and drive Bitcoin in Russia to a very buoyant and active black market and secondly, privatised blockchains without the global network of auditors making sure it is not rigged is not much of an improvement on the existing financial solutions. It sounds like a government trying to sound hip by using the word blockchain like all the banks are today, but getting it very wrong by ignoring the real innovation called Bitcoin.”
“The stated objective of R3 and the banks joining the initiative are ‘to collaborate on research, design, and engineering that will advance innovative solutions for clients that meet banking requirements for security, reliability, performance, scalability, and auditing.’ I am sure that does not necessarily exclude applications around digital currencies and a raft of applications that are emerging around blockchain adoption. Yes, some banks might just use the platform to adopt Bitcoin, but in a way that is transparent and compliant. I like to think of the blockchain as ‘middleware’, to mention an old IT term, around which a number of applications can be spun, not least that being of interbank and corresponding bank settlements, payment processing and remittances. One would like to think that banks will pass the benefits on to their consumers, those are the natural laws of competition, which we are already seeing in the fintech and alt finance spaces rising up to challenge or complement traditional banking and financial service offerings in developed and emerging markets,” thinks Manie Eagar, co-founder and chairman of the DiGiFIn and director of Bitcoin Alliance of Canada.
“The representatives of the big banks and financial institutions that are working on blockchain technologies are just people like you. They are Bitcoiners, crypto-fanatics. But they can't sell it to their supervisors, or the people in charge. Instead, they wrapped it up into something different. They know that this is what they are talking about. The people in charge don't quite yet appreciate that but once they fall in love with things we all fall in love with, they are going to realize that it's not so different after all. We will get to the same place. Just give them time,“ Marco Santori, a counsel at Pillsbury Law company told the audience at Latin American Bitcoin Conference last weekend.
Russian Point of View
When the article was already over we got a comment from Ivan Tikhonov the founder of Bits.Media from Russia:
“SBT Venture Capital, a venture capital fund supported by the Savings Bank has already stated this year that it is interested in Bitcoin and blockchain technology. Thus, Mircea Mihaesku said that the fund is interested in fundamental changes that affect the entire financial sector. It seems that we are now seeing real steps towards this”.
Sberbank the first Russian bank intends to join the international consortium blockchain-R3, which includes more than 30 of the world's biggest banks.
President of Sberbank German Gref also spoke out in support of cryptocurrency “It's definitely not something that should be prohibited. It. should be studied and understood fully. If cryptocurrency is really not so simple in terms of legislation, any laws regarding blockchain technology will certainly not be broken and no one is planning to prohibit it. It is therefore not surprising that the active development of this area begins with the study blockchain and implementation of solutions based on it.”