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Blockchain Is Not a Panacea for Finance, Says Russian Bank Official

Blockchain Is Not a Panacea for Finance, Says Russian Bank Official

The Central Bank of Russia’s (CBR) first deputy governor has stated that blockchain expertise isn’t the “universal solution,” many promised it could be 5 years in the past.

In an interview with Euromoney on April 2, Olga Skorobogatova took a deep dive into the financial institution’s initiatives, sandboxes, and experiences with blockchain deployment. 

Following three years of experimenting with the Masterchain platform — a native blockchain-based community for transferring useful monetary information like mortgage accounting — Skorobogatova stated, “Blockchain is a great fit for things like letters of credit and guarantees because it is essentially a technology of trust.”

However, she additional added that blockchain isn’t the cure-all that many believed it could be:

“I remember being told by some tech companies back then: ‘Olga, in five years everything will be powered by blockchain, there will be no other technologies.’ I responded that this technology would work in cases when it would create additional value but not as a substitution for everything. Time has proven me right.”

But what about cryptocurrencies?

Skorobogatova stated she doesn’t consider in cryptocurrencies as a technique of cost as they pose main dangers for prospects. She famous cryptocurrencies’ excessive volatility, lack of assure for financial savings, and utilization in cash laundering as main threats.

The deputy governor famous that the central financial institution is in talks with different regulators on the difficulty of worldwide stablecoins, stating that, at this level, stablecoins increase extra questions than solutions.

The CBR has flirted with the thought of a nationwide digital forex, which Skorobogatova questions as nicely:

“For me, the big question is if there is any added value in using central bank digital currencies (CBDCs) – for the economy, for individuals and for businesses. Clearly, people want fast digital payments, but this can be implemented with a national fast payments platform. What can CBDCs bring to the table? So far, no one in Russia or elsewhere has been able to give a convincing answer or even to explain the difference between electronic payments and CBDCs.”

Russia’s latest method to crypto and blockchain regulation

Meanwhile, Russia has postponed its invoice “On Digital Financial Assets” but once more. Anatoly Aksakov, chairman of the Russian State Duma Committee on Financial Markets and chairman of the National Banking Council on the CBR, admitted that earlier delays within the invoice’s adoption have been attributable to disagreement on the brand new asset kind between native authorities.

Aksakov stated that the central financial institution opposed the legalization of crypto whereas the State Duma advocated some crypto initiatives.

On March 24, the Ministry of Economic Development of Russia reportedly ready a draft regulation that will enable the testing of cryptocurrency and blockchain developments inside a particular regulatory sandbox.

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