Anchored in blockchain, Russia may use this technology for national payment system certification

The Russian Association of Financial Innovations (AFI) has recently submitted a proposal for improvements to the country’s payment system, which will be reviewed by the State Duma (Duma), the Ministry of Finance and the Federal Financial Management Agency (Rosfinmonitoring).

The proposal proposes a major improvement, including the use of blockchain technology to create an unchangeable and transparent user identity authentication system. In other words, the Russian government is cautiously planning to use blockchain for user authentication in the national payment system.

Russian media PlusWorld reported:

Simplify user authentication by developing and deploying a single identifier (most likely using blockchain technology), providing more opportunities for short-term transactions.

Potential advantages of blockchain

For the Russian government, the deployment of blockchain can bring multiple advantages to its national payment system. One of the more important advantages is secure data storage in a transparent ecosystem.

Blockchain ensures the secure transfer of data and broadcasts information in real time across the network, so the government can identify users even while their information is being updated.

In addition, the immutable and decentralized nature of blockchain can effectively prevent hacker attacks or data leaks. Compared with government financial and personal data databases that are easily manipulated, blockchain can provide a significant improvement.

Obstacles to blockchain deployment

Similar to other monetary or financial systems, governments will likely use blockchain to create an authentication platform and give individual departments and local agencies a degree of control.

However, having varying degrees of authorization for an immutable system within a single network would inevitably significantly reduce the advantages of a decentralized network.

In other words, it is impossible for blockchain to become centralized due to major security issues.

From media reports, it can be seen that the Russian government has a positive attitude towards blockchain. However, during the application and deployment stage, the government must take into account all possible problems.

The large-scale encrypted network Ethereum is under constant external attacks, and even such open source communities are not immune to security issues. Therefore, it is necessary to form an alliance or an experienced development team to maintain the blockchain system.