Russian payment company Qiwi follows R3 in forming domestic blockchain banking alliance

Russian payments company Qiwi sees potential for blockchain technology in the country and plans to form a banking consortium similar to R3.

In order to learn more about Qiwi’s plan, CoinTelegraph interviewed Konstantin Koltsov, director of its corporate relations department. Qiwi believes that in five years, blockchain will bring us diversified payment methods.

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Digital currencies and blockchain technology are controversial in Russia, sparking endless debate among supporters and opponents.

As the Russian government's attitude towards Bitcoin and Bitcoin technology (blockchain technology) has not yet been clear, its local companies have begun to express interest in developing blockchain technology.

Regarding the application of blockchain technology, Konstantin Koltsov said:

Blockchain technology has been a hot topic in our country and the overall debate trend is changing. The technology has been recognized in both financial and non-financial fields, thus gaining more and more supporters.

The rocky road of digital currency

However, digital currencies have been treated very differently. In the past few months, more and more people have begun to express their views on digital currencies, some believe that they should be studied, and some call for a complete ban because they believe that it will harm the country's financial system.

However, the development of digital currency is not a dead end. At an international conference held in Russia earlier this month, the theme was "Legal and Economic Challenges Facing Digital Currency". Participants expressed concerns about the ban on digital currency because they believed that if digital currency was completely banned, it would be impossible for the country's financial sector to profit from blockchain technology.

Koltsov told CoinTelegraph:

As far as I know, the participants of this meeting have reached a consensus that the country should study and learn about digital currency instead of simply rejecting it. The inter-departmental working group of the Russian lower house has evaluated the risks of cryptocurrency and believes that digital currency should become a global payment tool.

The Russian government has expressed its determination to issue a digital currency ban more than once, stating that any individual or company operating Bitcoin will be held criminally liable.

In May this year, the Russian Ministry of Finance submitted a draft of a cryptocurrency ban to the Ministry of Justice, prohibiting any form of mining and cryptocurrency operations. However, the Ministry of Justice rejected the draft because they believed that many of its contents, including some definitions (the draft defines digital currency as a "quasi-currency"), were not in their favor.

In addition, the draft also mentioned that any individual or company operating Bitcoin will face imprisonment and heavy fines. The Ministry of Justice believes that this punishment is too heavy because the extent of the risks brought by digital currency is still unknown.

Make friends with blockchain

Russian local companies are making rapid progress in research on blockchain technology.

Koltsov told CoinTelegraph:

The potential of blockchain in both financial and non-financial fields is unlimited. Qiwi is testing a new payment processing method based on blockchain technology.

The establishment of this banking alliance will undoubtedly accelerate the establishment of a benchmark for the development of blockchain technology in Russia. It is said that Qiwi has already invited many Russian banking giants, including Sberbank, Alfa Bank, B&N Bank, etc.

However, it is unclear whether Qiwi's banking alliance will extend an olive branch to non-banking institutions. The main strategy, communication and cooperation methods of this banking alliance are still unknown. As for whether the Russian government will support this banking alliance, it remains to be seen.

From a legal perspective

Russia's legislation on local financial sectors (such as mobile phones and electronic payments) has many loopholes. The European Commission has issued a revised Payment Services Directive (PSD2) to improve the security of various payment methods and develop financial services innovation.

This guideline will help European financial institutions improve their operating models. Many people believe that it can reform the European financial system.

Russia always takes a back seat in the initial development stages of various fields, so Qiwi’s establishment of a banking alliance is, to some extent, also intended to give Russia a “say” in the financial field.

Qiwi: We believe in blockchain

Blockchain is the most innovative technology in the past decade. In addition to the financial sector, it can also make waves in other fields.

Qiwi believes that blockchain is a good solution to the trust crisis.

Blockchain can help remove the middleman from various processes, both in the financial and non-financial sectors. The characteristic of blockchain is that it is highly secure. It has been proven to be resistant to various attacks, so it has the potential to promote the development of various fields. The question is which field will be the first to muster up the courage to use it. I think the financial technology field is the 'first to eat crabs'.