Russia Looks to Become Digital Banking Mecca

Russia

Russia, Russia Russia. Here in the U.S. its all about investigations and such BUT, while we investigate, Russia innovates. To wean itself off a hydrocarbon-based economy, Russia is looking to become a digital banking mecca and establish themselves as the most technologically savvy country on the planet. Laugh (ha ha) if you will, but Russian banks have developed a distributed ledger (Masterchain) via ethereum and blockchain. Still smirking? Russia is also legalizing  and regulating ICOs, has a central bank backed FinTech Association and….get this……the Russian Bitcoin Foundation has a presence in New York City. Does the U.S. have a central plan? But, we have better investigators.
(Bill Taylor/CEO)

“With Russia looking to cure its economy of a hydrocarbon addiction, a consortium of the country’s biggest banks is proposing that it explores a different kind of gas for the answer.

The lenders, including Sberbank PJSC and VTB Group, aren’t developing gas of the natural variety. It’s also the name of a virtual unit based on the blockchain of ethereum, the world’s biggest cryptocurrency after bitcoin. The banks are hoping that by adopting the technology they will make payments safer and faster, while thrusting Russia to the forefront of a trend that’s transforming the financial industry.

Two months after President Vladimir Putin met the founder of ethereum, the banks have developed a distributed ledger dubbed Masterchain that uses a modified ethereum protocol while complying with national security standards, according to the country’s central bank-backed FinTech Association.

 “Russia’s not a very developed banking market,” said Vyacheslav Putilovsky, an analyst at Moscow-based rating company Expert RA. “The top banks here are betting that they can catch up and maybe even overtake their western competitors in their adaptation of this type of technology.”

Blockchain — the technology used for verifying and recording transactions that’s at the heart of ethereum and bitcoin — can also be used to verify contractual agreements, intellectual property rights and public online ledgers without intermediaries. Applications like these may reshape the global financial system and other industries. R3, a global consortium similar to Russia’s FinTech Association, raised $107 million from its members including Bank of America Corp. and HSBC Holdings PLC in May…”

Full Story at Bloomberg