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Vneshekonombank puts its weight behind blockchain technology as the country’s public sector looks on

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Russia’s state-controlled bank, Vneshekonombank (VEB), expects to become a vehicle for a blockchain revolution in the country’s public sector.The bank is opening Russia’s first blockchain competence centre in Moscow at the National University of Science and Technology (MISIS) as part of a wider strategy to introduce the technology.


“There are very many possible directions for blockchain applications, such as property rights registration and document issuing or smart contract technology,” said VEB chairman Sergei Gorkov.


“We also see prospects for the introduction of blockchain in processes related to procurement. Blockchain provides great opportunities to optimise procurement, which it can make open and transparent.

”VEB’s plans for blockchain are in line with the Russian government’s recently announced strategy for developing the digital economy as the country tries to reduce its dependence on energy supply exports and become a global player in technology.

“Russia had two options for its technological development,” said Vladimir Demin, head of VEB’s blockchain competence centre. “It could have chosen to try to catch up with countries that were already far ahead in technology, which was a feasible way, but not a very interesting one.

“If we had chosen, for instance, to catch up with paging technologies back in the 1990s, we would have eventually caught up, but this would have led us nowhere. No one uses pagers any longer.
”According to Demin, Russia chose to focus on upcoming technologies that are new everywhere, such as blockchain, quantum computing, artificial intelligence and big data.


It is in these areas that VEB intends to be at the forefront of technological innovation.One of VEB’s main aims is to create a blockchain infrastructure that will later be used by the country’s public sector.


“Our goal is to create an ecosystem that will implement blockchain projects for state agencies and state corporations,” he said.“We also want to figure out which platforms blockchain projects will be implemented on. There are already dozens of platforms in the world.”

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VEB plans to select several blockchain platforms and certify them in compliance with Russian legislation to ensure the encryption systems they use are officially accepted. Then the platforms will be offered for implementation in various projects.


One platform has already been selected, with VEB recently signing an agreement with the Ethereum Foundation to use its platform.


“We want to show the market that the government is interested in blockchain,” said Demin. “If we want to be leaders, we need to show the market that there is demand for this technology and that it is efficient.

”As well as facilitating and managing projects and organising events,VEB’s blockchain competence centre is expected to run specific blockchain-based projects. For each of these, it will hire specialists, ranging from developing and encryption to legal services and consulting.


VEB is already running several pilot blockchain projects, and expects these to increase interest from government agencies and corporations.

One project that is close to completion is being run in collaboration with the Federal Service for State Registration, a government agency in charge of registering property deals.


“Our task is to speed up the process by removing intermediaries,” said Demin, adding that blockchain enables the agency to quickly obtain all the data it needs to register property deals by cutting out notaries and medical institutions issuing certificates, for example.


Another project is focusing on an intellectual property system based on smart contracts, which would revolutionise the existing copyright fee collection system, which has long been criticised for lack of transparency.“At this point, our task is not to make money, but to introduce the technology and show that it works,” said Demin.


“Money will be made by those who apply our pilot projects to industrial use. VEB will be just a moderator in this process.”

Legal challenges

]However, the introduction of blockchain technology to Russia’s public sector faces legal challenges because existing laws lag behind technological innovations. For example, the blockchain-based property deal registration system cannot be launched properly until certain legal amendments are made.


“On a technological level, we will solve this task quite quickly, but it has numerous legal nuances, and resolving these will take time,” said Demin. “But if we can show how attractive the prospect [of using blockchain] is, we will be able to amend the legislation quickly enough.


“The technological aspect of blockchain is the easiest part of it. The process of rolling out a blockchain system is relatively straightforward. But the structural and legal aspects are much more difficult.

”Another major challenge is a shortage of skilled professionals in the blockchain area. “For some time, we have tried to find blockchain specialists in the labour market and we realised there are too few of them, so our task is to train many more,” said Demin.


“We need hundreds of thousands – and in the very short term.”To increase the number of blockchain professionals, VEB has signed an agreement with Innopolis University near Kazan, Tatarstan, and will also facilitate training of blockchain specialists at MISIS.


Meanwhile, the bank plans to continue its technological advances, and the next stage will be a competence centre for quantum computing.


“This is not a very pressing issue because quantum computers are not around yet, but they may be in five years’ time, providing a totally new capacity for encryption, which, in turn, is vital for blockchain technology,” said Demin.


Russia has one of the world’s few schools for encryption, and this is certainly a field to look at, he added.


“VEB intends to combine all research in the fields of quantum computing and encryption in one competence centre to eventually make Russia a world leader in that field.”

Discover even more reports like this on Computer Weekly here: http://www.computerweekly.com/news/450427547/Russias-state-owned-bank-backs-blockchain

By John Bonar :

Russian interest in cryptocurrencies is blossoming with the endorsement of the country’s president Vladimir Putin. While some within the country’s financial sector, including Bank of Russia chairwoman, Elvira Nabiullina, remain cautious, others are embracing the crypto currency phenomena enthusiastically.

Vitalik Buterin, the Russian-Canadian founder of Ethereum the second largest blockchain platform after Bitcoin, hosted the “Ethereum Russia 2016” conference in Skolkovo, and later announced the formation of Ethereum Russia in partnership with Vladislav Martynov, CEO of Yota Devices, a mobile communications and connectivity devices company based in Russia and financed by Russia’s state-owned Bank for Development and Foreign Economic Affairs, (VEB).

Ethereum Russia was created to enhance the country’s ability to implement blockchain technology which underpins the cryptocurrencies.

Martynov explained that Ethereum Russia will provide education, events and architecture review for VEB, and guide the development of a new centre for blockchain research in the National University of Science and Technology (MISIS). It is funded by VEB. The centre in Russia’s Silcon Valley emulator will aim to introduce blockchain technology to the financial, banking and state sectors, as well as the industry of commodity exchange. Another function of the centre will be the support IT projects and startups working with blockchain technology.

Vice President of Skolkovo, Igor Bogachev, has said, “The Skolkovo Foundation, in co-operation with Ethereum, will organize the selection and acceleration of promising projects and teams, and provide support to blockchain startups in the form of tax benefits and grants.

The development centre will not only be able to satisfy the current demands of the state and business, but also the future ones: Internet of Things micropayments, complex smart contracts execution, creation of hybrid platforms and state registers of any kind.”

In early June this year The 23-year old Russian-born Buterin attended the St. Petersburg International Economic Forum and met with Mr. Putin. During the Forum the Russian President declared,” The digital economy isn’t a separate industry, it’s essentially the foundation for creating brand-new business models.”

The Moscow government plans to regulate cryptocurrencies like securities rather than outlawing them, Finance Minister Anton Siluanov told reporters in September. 

“The state certainly understands that cryptocurrencies are a reality, there is no point in prohibiting them,” Siluanov told reporters in Moscow. “It is possible to regulate them, so the Finance Ministry will draw up a bill by the end of the year.

”Alexander Dunaev, COO at emerging markets fintech company ID Finance, told Forbes magazine that the Russian government is recognizing the change in financial services caused by technological disruption. ‘The last time the world saw such an unprecedented change was in the second half of the 20th century with the adoption of personal computers - which Russia missed due to geopolitical isolation. There is a lot of will to avoid this pitfall in the future.’

Thanks to the original cryptocurrency Bitcoin’s widespread use for cross border anonymous transfers, many Russians consider bitcoins and other cryptocurrencies as money surrogates which have previously been linked with fraudulent pyramid schemes.

According to Bloomberg, Putin was attracted to Ethereum as a ‘potential tool to help Russia diversify its economy beyond oil and gas’. 

‘Blockchain may have the same effect on businesses that the emergence on the internet once had - it would change business models, and eliminate intermediaries such as escrow agents and clerks. If Russia implements it first, it will gain similar advantages to those the Western countries did at the start of the internet age,’ Martynov has said. 

The concern about cryptocurrency pyramid schemes has crystalized around Initial Coin Offerings (ICO’s) which have been used to raise millions virtually overnight and created millionaires out of the founders of a flood of new cryptocurrencies. 

These concerns prompted China’s draconian clamp down on ICO’s and cryptocurrency trading earlier in September which reverberated through the blockchain market....continue reading: 
http://www.marketoracle.co.uk/Article60281.html

While the landscape for blockchain technology is still in its infancy, its potential is transformational and has led to entities across industries to experiment and embrace it.

The ‘Big 4’ are no different. The four largest accounting firms in the world, dubbed as the Big 4, are active members of the blockchain revolution that’s all set to fundamentally change the way traditional services are offered and how businesses operate.Here’s how each of these firms is engaging with Bitcoin and the blockchain technology.

Deloitte

Deloitte uses the words ‘enigma,’ ‘paradox,’ and ‘opportunity’ for blockchain technology. In 2014, Deloitte launched Rubix—a blockchain offering that provides advisory services and builds distributed applications for clients across sectors, including the government.In May 2016, Deloitte’s first blockchain lab was created in Dublin followed by a second hub in New York in January this year and more such announcements are expected.

Deloitte joined the Ethereum Enterprise Alliance (EEA) and the Hyperledger Project by the Linux Foundation in May 2017.One of the very recent and interesting announcements has been the partnership of Deloitte CIS(Commonwealth of Independent States) with Waves Platform for “providing clients with comprehensive initial coin offering (ICO) services and customized blockchain solutions tailored for specific business tasks.”The two will also work towards legal mechanisms for regulating ICO projects, something which is much needed.

Deloitte has been open to Bitcoin as well. To improve accessibility, enable hands-on learning—with a motive to push greater blockchain adoption in Canada--the company even installed an ATM in September 2016 at their downtown Toronto office. Bitcoin is also accepted as payment at its internal restaurant, called Bistro 1858.

Ernst & YoungErnst & Young

(EY) became the first advisory firm to accept Bitcoin for its services (at select locations). EY Switzerland clients now have the option to settle their invoices for auditing and advisory services using Bitcoin (since the start of 2017).Marcel Stalder, CEO of EY Switzerland, believes, “It is important to us that everybody gets on board and prepares themselves for the revolution set to take place in the business world through blockchains, smart contracts and digital currencies.

” EY Switzerland showed further support to Bitcoin by joining the Bitcoin Association as a corporate member in May 2017.EY’s website reads ‘Blockchain technology is officially on the agenda,’ which conveys its commitment to the cause.

Last year, it threw a start-up challenge to explore blockchain solutions for two industries—digital identity and energy trading.In April 2017, EY launched Ops Chain, a set of applications and services to facilitate the commercial use of blockchain technology across the enterprise. It also added New York as the third location for its blockchain lab along with London and Thiruvananthapuram (India). 

PricewaterhouseCoopers

(PwC)PricewaterhouseCoopers (PwC) sees enormous potential for blockchain in financial services. To exploit and commercialize blockchain, PwC began by recruiting 15 leading technology specialists to set up a new global technology team in January 2016.

Since then, PwC has collaborated with various enterprises—public and private—to push the applicability of the blockchain technology around the world.In November 2016, PwC launched Vulcan Digital Asset Services to enable digital assets to be used for everyday banking, commerce and other personal currency and asset-related services in collaboration with Bloq, Libra, and Netki. 

On the other hand, as per a March announcement, PwC is exploring blockchain solutions with Alibaba and food industry stakeholders to address supply chain fraud and build trust in the food industry.In its recent report, ‘Redrawing the lines: FinTech’s growing influence on financial services,’ PwC declares that ‘Blockchain is coming out of the lab.’ It highlights that over three quarters of global financial services companies plan to adopt blockchain in live production systems by... continue reading: http://www.nasdaq.com/article/big-4-accounting-firms-are-experimenting-with-blockchain-and-bitcoin-c...