Russia’s largest bank Sberbank expects to join the international consortium R3 alongside Goldman Sachs, JP Morgan, Credit Suisse, among others, to develop blockchain-powered financial services, according to kommersant.ru. But while the technology can make the bank’s operations more efficient, it may also help reduce dependency on the internal SWIFT network in light of the economic sanctions imposed on the country.
Jumping on the Bandwagon
Sberbank — the biggest bank in Russia and ranked 33rd in the world — is planning to join the international consortium R3 to develop financial services based on Bitcoin’s blockchain technology, according to First Deputy Chairman of the Executive Board at Sberbank, Lev Khasis.
“We are working closely with this consortium and are watching where the evolution of blockchain technology will lead,” said Khasis. “Currently, we are reviewing the [R3] documentation and its viability; and I do not exclude that we will become a part of this consortium, even though there hasn’t been any formal decision.”
The bank also confirmed that it is ready to implement blockchain technology as soon a market-ready solution has been developed. Khasis affirmed:
The R3 consortium was established in September 2015 by members Goldman Sachs, JP Morgan, Credit Suisse, Barclays, and others. The group has been growing in numbers and already includes 30 banks from all over the globe.
A Weapon Against Sanctions?
But given the negative attitude toward cryptocurrency, and Bitcoin in particular, in Russia, the bank confirmed that there are no plans to issue its own crypto coin.
“As far as I understand, the [Bank of Russia’s] position has not changed,” explained Khasis. “It has a negative stance on cryptocurrency.”
“[T]he blockchain can be used by us for internal mutual settlements, executing transactions between our daughter companies and other banks. This has nothing to do with cryptocurrency – it is simply a different method for settlement that is simpler, faster and more reliable.”
Interestingly, the blockchain might be used to not only make internal banking operations more efficient but also reduce dependency on SWIFT, a communications network that connections thousands of banks across the globe, in the future. At the same time, SWIFT has just confirmed it will also be looking to implement blockchain technology for speeding up settlements.
“When the sanctions were just implemented, Russian banks were afraid they would be excluded from the SWIFT international system,” former IT Deputy Director at Home Credit Bank, Kirill Kibalko, told kommersant.ru. “Using the blockchain increases the bank’s stability and removes any political risk because the blockchain is a distributed system without a single controlling entity that could cut a bank off from the network.”
This might indeed be the case as the R3 consortium is reportedly planning an open-source blockchain for banks and will be operating in less than a year, reports the Sydney Morning Herald. Therefore, it is possible that the Russian bank could be provided with a solution that will enable it to bypass US-led economic sanctions.
But considering that Russia has been on a mission to establish its own SWIFT-like network among the BRICS, the question everyone will probably be asking soon is: Who isn’t “studying blockchain technology”?
What do you think of the R3 blockchain consortium? How will it impact Bitcoin? Share your thoughts and comments below!
Images courtesy of Bloomberg.com, Sberbank