Russian Central Bank will provide an opportunity to use smart contracts and electronic letters of credit as early as 2019 on a large scale. The authority is preparing the necessary framework to implement blockchain into its operating system. A domestic media source Izvestia has reported. The Central Bank is planning drastic changes to the Regulation 383-P "On the rules for the transfer of funds".
Why it is important
- Blockchain technology will reduce the costs of providing and storing paper documents, speeding up calculations, and reducing the risks of falsification.
- According to the Central Bank, the emergence of an electronic letter of credit will shorten the average term of transactions from 18 to just 8 days.
Electronic letters of credit will appear on the "Masterchain" starting from 2018, and in 2019 the technology will be available for mass use, commented to Izvestia the source close to the situation.
Earlier it was announced that Central Bank of Russia is looking into the technology to be implemented to be used for Pan-Eurasian payments.
The new version of the document pays more attention to the requirements for electronic documents. With an update of the framework, it will send documents not only through emails, but also transfer them through distributed ledger systems. This, according to experts, will significantly increase the transparency of operations for all parties involved in the deal. This will also increase the interest of the market in letters of credit. Currently up to 80% of initial applications for letters of credit are rejected due to improper handling of documentation in Russia, said the expert.
Recently the Head of the Russian leading bank - Sberbank Herman Gref urged not to limit the development of the blockchain system, saying that he always stood for development of new technologies without limiting them, blockchain technology included. “And that’s because cryptocurrencies are the byproduct of the blockchain technology development, which is critically important.
Earlier in May, a source close to Russia’s Central Bank said that Russian authorities are planning to transfer the payment system SPFS (similar to SWIFT) to the blockchain. Potential disconnection of Russia from SWIFT has been a cause of concerns for country's banks since 2014 when U.S. and EU introduced the first round of sanctions against Moscow. In April 2018, the global financial messaging service provider SWIFT announced that the company plans to keep away from politics.
By Nadya Astam