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Russia is Wise to Embrace Blockchain, Shouldn't Restrict Bitcoin - Specialist

© REUTERS / Dado RuvicA coin representing the bitcoin cryptocurrency is seen on computer circuit boards in this illustration picture, October 26, 2017
A coin representing the bitcoin cryptocurrency is seen on computer circuit boards in this illustration picture, October 26, 2017 - Sputnik International
Russia's state-owned Sberbank announced its blockchain-implementation partnership with the Russian Federal Antimonopoly Service (FAS) in October, marking the first official use of blockchain technology by the Russian government.

According to a Sberbank press release, the partnership will allow them to explore data transfer and storage uses for blockchain. Sberbank joins dozens of other banks and financial institutions using the Ethereum platform, the leading choice for smart contracts, which have countless applications in various other fields.

"Russia is wise to embrace blockchain as the future. Blockchain is used by stock exchanges, hospitals, banks and countless other institutions around the world. It’s reinventing the IPO through Initial Coin Offerings (ICOs.) It is used to secure documents, ranging from election ballots to bonds to medical records, but it’s about to become a bigger deal than anyone ever envisioned," Nick Spanos, co-founder of the Zap Project, and the Bitcoin Center NYC – New York’s first bitcoin exchange – told Sputnik News.

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Zap plays a pioneering role in broadening the uses of smart contracts, which previously only operated based on information within the blockchain. Zap will soon launch a marketplace where users can subscribe to real-world data streams and events — such as weather, oil production, or deaths — which can then trigger a smart contract provision through “oracles.” This innovative technology has real-life applications in agriculture, emergency services, polling, crisis-management, and driverless vehicles.

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The Russian government has also expressed its interest in cryptocurrency, with their Minister of Communications, Nikolay Nikiforov, announcing plans for the creation and distribution of the country's own digital currency in October, called the CryptoRuble, which will reportedly be blockchain-based. The CryptoRuble is unlikely to provide users with the same level of anonymity as other cryptocurrencies, as authorities want to ensure that this new, centrally-issued currency doesn’t become a tool for crime.

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Russia has been less receptive towards the use of cryptocurrencies by individuals and the private sector, though it has refrained from outlawing them entirely, as China did earlier this year. Industry heavyweights and experts are eager for Russian authorities to shift their stance on bitcoin and the wider decentralized cryptocurrency market.

"The beauty of it is that everyone can see in many places how digital currencies revolutionize how business is done and how the average person lives. Common sense and popular demand will win out in countries slow to accept this reality. Every country that tries to impede bitcoin only stifles their own global competitiveness," Spanos added.

READ MORE: Russian Banking Sector Needs More Private Banks — Sberbank CEO

Russia is currently finalizing legislation which will alter the regulation of the cryptocurrency market, with a particular focus on initial coin offerings (ICOs.) Chairman of the State Duma's financial markets committee Anatoly Aksakov told RIA Novosti that he expects the draft law to be completed by next March.

The views and opinions expressed in this article are solely those of the author and do not necessarily reflect those of Sputnik.

Follow Suliman Mulhem on Twitter.

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