Blockchain technology can help solve current problems with payments, said Sberbank’s deputy chief executive officer. Russia’s largest bank is working with other financial institutions to develop blockchain-based payment applications, the banker revealed.
Sberbank Finds Blockchain Settlement to Solve Troubles in Russia
With Russia’s major banks cut off from the world’s leading interbank payment system, SWIFT, and Moscow’s war in Ukraine, blockchain can help solve payment-related problems, Sberbank’s First Deputy CEO Alexander Vedyakhin is convinced.
“This is a distributed ledger, there is no single point of decision-making, no center, no knife switch that can be shut off, so it is blockchain technology that will enable us to solve this problem,” Vedyakhin explained, quoting from the Interfax news agency.
At a meeting of the Budget and Financial Markets Committee of the Russian Federation’s upper house of parliament, the executive added that “everyone keeps track of everything and there are special protocols that can be done in secret.”
The main state-owned Sberbank, Russia’s largest bank by assets, is currently working with other banking institutions and the Central Bank of Russia on the application of blockchain technology Vedyakhin, who believes that blockchain will become even more relevant in 2023 emphasized the following.
The next generation payment system is blockchain.
Speed and privacy issues have been overcome with the latest protocol, Vedyakhin announced
. Bunker also noted that crypto-related technologies have developed over the past few years and highlighted several outstanding issues that need to be resolved. These include the capacity of blockchain platforms and the confidentiality of transactions.
“The first was speed. What we were seeing previously could not handle large numbers of transactions. Now we believe that this problem has been largely solved; the second was confidentiality, because if you had a transaction and 10 million other people saw it, they would not want to do that transaction. This problem has also been solved with the new protocol,” Alexander Vedyakhin elaborated.
After the invasion of Ukraine in late February 2022, many Russian banks, including Sberbank, were subject to sanctions by the US and EU. The financial restrictions severely limited Russia’s access to the global financial system.
Last June, Sberbank CEO Herman Gref said that the bank had begun work on creating an international payment system to replace SWIFT, which it plans to complete within a year. The Russian manufacturing and technology conglomerate Rostec announced a blockchain-based platform with similar objectives in the same month. Legalization of crypto payments for cross-border payments is also being considered as an option.
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