Russian Lender VTB Patents Blockchain Payment Technology
January 26, 2019 by Vladimir Litvinov
The Russian state-controlled bank VTB has patented a technology for blockchain payments as it moves to offer distributed ledger-related services to its customers. What will the big bank do with the tech now that it has a patent secured?
Also read: Blockport Allows Bitcoin Deposits, Pursues Hybrid-Decentralized Exchange Model
Subscribe to the Bitsonline YouTube channel for great videos featuring industry insiders & experts
VTB Wins Patent in Blockchain Pivot
The technology facilitates multiple issuers, the bank said, and would foster the development of mutual payment services between a practically unlimited number of parties.
VTB aims to use the technology in such services as instant payments, cross-border payments, and loyalty programs, with the bank targeting both private individuals and corporate customers.
The multiple issuer technology is expected to cut costs and improve the efficiency of business processes, the lender hopes.
“VTB’s investments into IT are now switching from task-specific to strategic,” Olga Dergunova, VTB’s deputy chair of the board, said in a press release.
“While earlier the focus was on local tasks, now we are building major IT systems.”
The technology was developed from the lender’s earlier-tested blockchain-based tool called the Digital Payment Service, intended for p2p payments. In that solution, DLT is used to ensure the immutability of information about users’ account balances and bank information for clearing and mutual payments. Smart contracts are used to facilitate payments, while the transaction speed is limited only by the blockchain’s throughput.
Still, the system doesn’t stipulate the use of cryptocurrencies, and all payments are made in fiat currencies.
Incidentally, the development of the blockchain-based technology signifies an about-face move for VTB, which just recently was skeptical about the prospects of blockchain technology in the financial industry.
Only a few months ago, the bank’s senior vice president Dmitry Snesar told Russian media that VTB wasn’t going to adopt blockchain solutions as the technology had “no commercial applications” and was only suitable for cryptocurrencies.
Shifting Digital Tides?
The state lender’s move to embrace blockchain reflects the overall changing attitude towards crypto among senior Russian government officials.
Just last week, local legislators adopted a crypto-friendlier definition of digital financial assets, while a long-awaited law on crypto is expected to be adopted in the coming weeks.
Meanwhile, other banks operating in Russia have been more adventurous in their experiments with blockchain technology.
Last September, the local subsidiary of the Austrian lender Raiffeisenbank ran the country’s first ever blockchain-powered mortgage deal.
Earlier that month, Russia’s Central Bank ran a test ICO in a sandbox in a move to examine the potential of blockchain-based solutions.
What’s your take? Will other Russian banks began to make blockchain pivots like VTB? Let us know in the comments section below.
Images via Pixabay