Russian Central Bank to Use Blockchain for a Register of Depositors

Russia’s Central Bank intends to use blockchain technology in creating a unified register of bank depositors. According to the Central Bank’s experts, the technology may solve the so-called problem of off-balance depositors.

What’s the Problem?

The thing is that following revocation of a banking license, it turns out that not all depositors had been registered by the credit institutions. Banks save money on insuring deposits, and don’t turn it on accounts, using it at their own discretion instead. Once a bank loses its license, and a depositor requests compensation, it turns out that there is no data on such deposit.

The problem even inspires some scam artists to take the guise of such off-balance depositors. Three unlicensed Russian banks alone (Miko Bank, Stella Bank, and Crossinvestbank) had nearly 5,000 off-balance depositors, who had lost nearly 3 billion rubles of insurance payouts.

“The Central Bank faced the problem of off-balance depositors back in early 2014. By 2015, it became clear that it’s not an isolated situation, and many small regional banks in fact had two depositor registers,” Robert Bagratuni, former marketing expert at Mail.Ru told Russian publication Izvestia.

Blockchain or a Private Distributed Database?

Another Izvestia’s source related to the Central Bank elaborated that currently the regulator is unsure whether to store the register at the Bank of Russia’s servers, and how exactly blockchain technology could be employed to store it.

Some experts also noted that there are several problems with blockchain technology, like personal data protection, hacker attacks, and overall novelty of the technology. However, it all might mean that the Central Bank is currently not well-informed as to particular features of the technology.

Unfortunately, it is unclear whether the Central Bank would use existing public blockchain to store the information, or it would develop a private distributed database.

Earlier ForkLog reported on the Russian Post’s intent to use blockchain technology in shipment tracking, as well as on the initiative from watches manufacturer Raketa to use Emercoin’s blockchain for storage of certificates of authenticity.

Notwithstanding the continuously growing interest for blockchain from financial and official organizations in Russia, there are only a few successful projects to date. The most known blockchain-related initiative in Russia is still so-called BitRuble developed under the auspices of local payments processor QIWI. In addition, Russia’s National Settlement Depository has announced it successfully tested a blockchain-based system for shareholder voting. The system used NXT source code.