Payment service provider QIWI establishes Russian blockchain banking alliance

Rage Comment : After Russia annexed Ukraine, it suffered severe economic sanctions from the European Union and Western countries, which made it impossible for Russian companies to conduct normal transactions with foreign counterparties. Therefore, it established its own blockchain banking alliance, led by payment service provider QIWI. The government also strongly supports the development of applications for blockchain, the underlying technology of Bitcoin, but it needs to formulate industry standards before the end of this year, which can get full support from the Russian Central Bank. This means that Russia wants to use blockchain technology to get out of the predicament of economic sanctions, but the result will have to wait until the industry standards are released to see the results.

Translation: Nicole

Russia may soon have its own blockchain banking consortium, led by major Russian payment service provider QIWI.

Russia is too paranoid, even too cautious, about Bitcoin and other digital currencies. They believe that exchanging Bitcoin for rubles is a crime. According to a recent legislation passed by the Russian Ministry of Finance, anyone who exchanges Bitcoin will face 4 years in prison and a high fine. However, this does not mean that the development of Bitcoin's underlying technology will be stopped.

Government officials, including Russian President Vladimir Putin, have stated on multiple occasions that they will develop blockchain technology and apply it to various fields. The development of Bitcoin technology in the Russian financial sector has been realized, especially when the news of Russian payment service company QIWI appeared in various news reports. QIWI has established a blockchain alliance composed of various Russian banks and financial companies to develop blockchain technology applications in these fields.

Russian news media said that the news of QIWI's involvement in blockchain technology was revealed anonymously by an insider. Some Russian banks want to join the blockchain alliance, including the Russian Federal Reserve Bank, BIN Bank and Alfa Bank. It is speculated that banking institutions also want regulators to quickly develop technical and operational standards for blockchain technology in the banking and financial sectors, otherwise it will lead to overindulgence in these industries.

QIWI’s blockchain banking alliance and sanctions

Reports indicate that the development of blockchain technology standards for domestic banks in Russia is also due to EU and U.S. sanctions. According to Izvestia, the request of Russia’s largest bank, the Russian Federal Reserve, to join the international blockchain consortium R3 was rejected because the bank is on the EU and U.S. sanctions list.

Russia has been hit with severe economic sanctions from the European Union and Western powers since the unrest in Ukraine led to Russia’s annexation of Crimea. As the sanctions continue, many Russian companies and celebrities are finding that they cannot conduct normal transactions and business activities with foreign counterparties.

If the alliance led by QIWI can develop operational standards for blockchain-based solutions by the end of this year, it is likely to receive full support from the Russian Central Bank. Otherwise, the central bank will not allow the alliance’s bank members to continue developing blockchain technology.