The Russian government is to begin testing a blockchain-based land registry system early next year.

According to a draft resolution published by the Ministry of Economic Development, the Federal Service for State Registration, Cadastre and Cartography (Rosreetr), the Federal Tax Service and the Government of Moscow will assess the trial through July 1, 2018. The ministry will submit and release a final report on the trial by Sept. 1.

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According to the translated document:

“The use of blockchain will be aimed at increasing the availability of information on the property registry, guarantees of protection of property rights, as well as the level of citizens’ trust in the sphere of turnover of real estate.”

The pilot project comes seven months after Prime Minister Dmitry Medvedev asked two government ministries to begin looking into possible public-sector applications of blockchain technology.

He said at the time: “We need to analyze in general, as far as it is applicable in our governance system – and public administration, and in the economy … I instructed the relevant ministries – the Ministry of Communications and the Ministry of Economic Development – to consider the possibility of using these technologies in preparing the program ‘Digital Economy’.”

In a press release, Economic Development Minister Maxim Oreshkin said the high cost of operating Rosreetr made it a top choice for applying new technologies like blockchain.

Russia’s announcement follows a plethora of other national and regional governments announcing their own land-registration projects. Sweden, Ukraine, and the United Kingdom have all launched trials, along with two Brazilian municipalities and the Indian state of Andhra Pradesh.

Russian coat of arms image via Shutterstock

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The Enterprise Ethereum Alliance just welcomed its first Russian bank.

After signing up more than 100 businesses to build enterprise distributed ledger technology compatible with the ethereum blockchain, the group has added Sberbank, the nation’s largest bank, to its growing list.

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Revealed in interview with CoinDesk, Sberbank framed its addition to the alliance as a new way to capitalize on international markets.

Evgeniy Kravchenko, head of trade finance and correspondent banking at Sberbank, told CoinDesk:

“The next step for our blockchain team will be operations with foreign-based financial institutions and other banks, to do some international transactions, to see how we can increase the transparency and improve the trust between banks and corporate clients.”

Already, Sberbank reported that it has completed at least two blockchain proofs-of-concept – one for a “smart” letter of credit and another for a letter of guarantee – working in cooperation with regulators, the minister of the economy, other banks and Russia’s International Chamber of Commerce.

Kravchenko, however, said that its entrance into the EEA is part of a bid to go beyond the initial use cases its already tested.

“We’ll be working with other banks on projects in other business areas, apart from trade finance: payments, lending, retail, everything that’s possible,” he added.

Critical mass

But Kravchenko was keen not to suggest that he’s limiting the scope of Sberbank’s work just alliance members.

Instead, he says the bank is interested in continuing to work with Russian banks who aren’t members of the EEA on new and existing projects.

“The more players on the network, the better the network will be,” said Kravchenko.

But Kravchenko is no blockchain maximalist. In fact, Kravchenko himself imagines a world where blockchain might not be exactly as necessary as some supporters think.

Using the Sibos conference as an example, he said it remains unknown if the technology could, say, replace or replicate the services offered by Swift, the interbank messaging service that also serves as conference host.

He concluded:

“I think blockchain may influience all the parties who are represented here, because all the banks are here, Swift is here. But the main message from my side is we need to do it together and jointly with other players.”

Sberbank office image via Shutterstock

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The first deputy governor of Russia’s central bank, Sergei Shvetsov, has said that his institution will support efforts to block access to external websites selling cryptocurrencies in the country.

Speaking at a conference on Tuesday, Reuters reports that Shvetsov cited the “unreasonably high risks” involved in cryptocurrency investment as a reason for the proposed measure, adding: “We cannot give direct and easy access to such dubious instruments for retail (investors).”

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As such, the Bank of Russia will be working alongside the judiciary to ensure the closure of websites offering these services – a crackdown that he indicated will extend to “all cryptocurrency derivatives.”

Russian news agency TASS quotes Shvetsov as stating:

“We consider all cryptocurrency derivatives to be a negative development on the Russian market and do not consider it possible to support it, and will even assume measures to restrict potential operations with such instruments made by the regulated part of the Russian market. Meanwhile, we assume efforts aimed at closing external websites that allow Russian citizens to acquire such assets together with the General Prosecutor’s Office.”

Shvetsov further added that, with bitcoin being an asset that can generate high returns very quickly, it shows signs of being a pyramid scheme.

The move to block access to cryptocurrency trading websites follows a number of warnings from Russian authorities in the past few months.

Alexey Moiseev, the country’s deputy finance minister, said in September that he expects upcoming legislation to feature a flat-out ban on payments made in cryptocurrency. Earlier the same month, deputy governor of the Bank of Russia Dmitry Skobelkin told Bloomberg: “China doesn’t recognize cryptocurrency as payment and forbids ICOs. Our views are absolutely similar.”

Shvetsov image via Shutterstock

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The National Settlement Depository (NSD), the central depository for Russia’s largest securities exchange group, has announced it is testing a new commercial bond trading platform built on top of the Hyperledger blockchain consortium’s Fabric software.

Already, Raiffeisenbank Russia has used the prototype platform to purchase $10 million-worth of bonds of MegaFon, the country’s second-largest mobile phone network. The bonds have a redemption date of December 22 and, despite the short-lived nature of the test, the NSD concluded that the technology could help keep the process “simple and transparent.”

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“The ultimate goal [of the] NSD is to build blockchain infrastructure for any innovative financial product to operate on. Once the infrastructure is created, [the] technology holds potential to deliver a large variety of financial products and services operated by smart contracts,” Eddie Astanin, chairman of the NSD’s executive board, said in a statement.

Notably, the central depository operator has made the code behind the project open source on GitHub. California-based software firm Altoros also took part in developing the prototype platform.

The project adds to the slate of initiatives already underway at the NSD, including a cryptocurrency wallet as part of a broader suite of services.

“Our goal is to create a secure and user-friendly accounting infrastructure for digital assets,” Astanin said in a statement at the time.

The Linux Foundation-led Hyperledger consortium takes a focus on building blockchains for enterprises, and has so far signed up more than 130 members. Notably, it issued the Fabric software’s official release candidate in June, framing it as an important step towards a finalized version 1.0 launch.

Trading charts image via Shutterstock

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Russian Deputy Prime Minister Arkady Dvorkovich has said he believes blockchain technology could be applied “broadly” to state administration in the country.

Making his comments at an international science and technology forum in Kyoto, Japan, Dvorkovich stated:

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“I don’t have the slightest doubt blockchain technologies will find broad use in state administration in the short term.”

As reported by Russia’s state-owned news service TASS, the politician also spelled out that the technology will require a legal framework in which to operate, adding that authorities are looking to recent regulatory developments in Japan as an example.

“All of these novelties require legislative foundation for further development, and we’re studying Japan’s experience with much interest now,” he said.

Japan has taken a more progressive approach toward blockchain and cryptocurrencies compared to other nations. The country passed legislation earlier this year which recognized bitcoin as a form of legal tender, and last week, 11 cryptocurrency exchanges were granted operating licenses.

Dvorkovich continued later emphasized that the actual process of integrating blockchain, as well as other new technologies, could involve some additional hurdles.

“The greatest challenge for the governments is to develop the regulations that would avert the emergence of a yet another fiscal bubble and would pave the road for new technological and scientific discoveries,” he said.

Development of these regulations are likely to be completed by 2019, TASS has previously indicated.

The deputy prime minister’s statements come as part of a wider effort within Russia to implement blockchain into a variety of services. In a speech in March, Prime Minister Dmitry Medvedev ordered two government ministries and a state-owned development bank to research potential applications of the tech. A week prior, he stated that blockchain could “decisively change our lives.”

A cryptocurrency law is currently being developed in Russia, though it is likely take a more restrictive tone than Japan’s recent legislation. Alexey Moiseev, Russia’s deputy finance minister, has said he expects the legislation to impose new restrictions on the kinds of permissible transactions.

Arkady Dvorkovich image via Shutterstock

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