Blockchain will become more relevant in payments this year, says Sberbank Exec – Blockchain Bitcoin News

Blockchain technology can help solve current problems with settlements, according to the deputy CEO of Sberbank. Russia’s largest bank is working with other financial institutions to develop blockchain-based payment applications, the banker revealed.

Sberbank sees solution to Russia’s problems with settlement in blockchain

With major Russian banks disconnected from the main global interbank payment system, SWIFT, due to Moscow’s war on Ukraine, blockchain will help solve the problem of payments, Sberbank’s First Deputy CEO Alexander Vedyakhin is convinced.

“It is blockchain technology that will make it possible to solve this problem because this is a distributed ledger, there is no single point of decision-making, no center, no switch that can be turned off,” explained Vedyakhin, quoted by Interfax News Agency.

“Everyone has everything registered, there are special protocols that make it possible to do this confidentially,” the leader added during a meeting of the budget and financial market committee of the Federation Council, the upper house of the Russian parliament.

Majority state-owned Sberbank, which is Russia’s largest bank by assets, is currently researching the use of blockchain technology along with other banking institutions and Russia’s central bank. Vedyakhin, who believes that blockchain will become even more relevant in 2023, emphasized:

The next generation of payment systems is blockchain.

Problems with speed and privacy overcome in the latest protocols, says Vedyakhin

The banker also noted that the crypto-related technology has evolved in recent years and highlighted some of the outstanding issues that needed to be resolved. These include the capacity of blockchain platforms and the confidentiality of transactions.

“The first was speed. What we saw before did not allow us to process a large number of transactions. Now we believe that this problem is generally solved. The other was confidentiality… If we have a transaction, and another 10 million people see it, you’re unlikely to do it. Now this problem is also solved in the new protocols,” elaborated Alexander Vedyakhin.

A number of Russian banks, including Sberbank, were hit by sanctions imposed by the United States and the European Union following the invasion of Ukraine in late February 2022. The financial restrictions severely limited Russia’s access to the global financial system.

In June last year, CEO of Sberbank Herman Gref said that the bank has started work on establishing an international settlement system, an alternative to SWIFT, and plans to complete it within a year. Russia’s manufacturing and technology conglomerate Rostec announced a blockchain-based platform with a similar purpose the same month. Legalization of crypto payments for cross-border settlements has also been considered as an option.

Do you think Russia will try to use blockchain technology and cryptocurrencies to circumvent sanctions? Share your thoughts on the topic in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’ quote: “To be a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.