09:59 GMT08 May 2021
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    A prominent Russian banker explained the considerable potential of the blockchain technology during the International Economic Forum in St. Petersburg.

    The 21st annual International Economic Forum was held in the Russian city of St. Petersburg on June 1-3, attended by ministers and top businessmen from 26 countries, as well as representatives of various international organizations.

    One of the words frequently mentioned during the forum was ‘blockchain’, as government representatives and business leaders alike pondered on the role this emerging technology might play in the banking sector.

    However, as Denis Cherkasov CEO at SBVC Asset Management, Sberbank Group, explained to Sputnik Radio correspondent, while blockchain is indeed a current “buzzword” and represents a technological breakthrough, few understand how it all actually fits together.

    "This is a breakthrough technology. However, we should understand that this is rather an infrastructure technology,” he said, adding that it cannot be currently implemented "on a retail level". "It allows you to build transactions and make a trustworthy chain of transactions in an environment where you don’t have a central regulator."

    He said that this technology is invaluable for situations involving "a number of players in the industry and financial technology or… machines and robots all over the world making contracts with each other, including trading robots."

    "They all need algorithms to communicate and to conduct transactions in a trustworthy way. So these are the immediate benefits of the blockchain technology which will spill down to the retail level later on through improved and increased reliability of services, through lower costs of services and through better, and hopefully faster, means of communication," Cherkasov said.

    He warned however that it will likely take up to five years from now to fully unlock the potential of blockchain, comparing the current situation to "the early days of the Internet."

    "I think that few of us realized what the Internet would lead to ten years ago, what kind of services we can (now) provide with the Internet. And we have pretty much the same situation with the blockchain: we don’t know where it leads, and while we know its immediate benefits it will take time to unlock its potential," Cherkasov surmised.


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