Bank of Russia sets up working group on blockchain technologies

Bank of Russia sets up working group on blockchain technologies

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Russia’s financial regulator, Bank of Russia, announced it has set up a working group whose main task is to analyze the technological innovations on the financial markets and the blockchain technology in particular.

The deputy chair of the Bank of Russia, Olga Skorobogatova who headed the group, noted that the fast development and digitalization of the financial technologies creates new ecosystems and business models and change the behavior of the financial services users. “The highly technological financial market needs a highly technological regulator who needs to be up to date with the new technologies and processes,” Skorobogatova said, quoted by the Bank of Russia press office.

The working group will hold regular meetings with bank representatives, self-regulation organizations and other players on the financial markets to discuss the aspects and applications of the new financial technologies.

The Bank of Russia decision comes several days after Andrey Shamraev, deputy director of the payments regulation department of the bank said in the lower chamber of the Russian parliament that the regulator is against the cryptocurrencies, including the bitcoin, but supports the use of distributed ledgers such as the blockchain.

“We support technologies wholeheartedly, but we are against the surrogates,” Shamraev said, quoted by the RIA Novosti news agency. “The cryptocurrencies are a surrogate, which from a legal point of view has a number of significant consequences. But the blockchain distributed database technology and its many useful applications is transforming into a banking system and a financial market and it is a goal worth pursuing.”

The blockchain distributed database was developed on the bitcoin protocol and keeps record of data records and public ledgers on bitcoin transactions. Its main advantages are that the records in it are almost impossible to be tampered with and the information is recorded, stored and published within miliseconds of the transaction. The technology and philosophy of the blockchain are being considered as the future model for processing and recording financial transactions.

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