Russian First Deputy Prime Minister Igor Shuvalov has stated that Russia will be concentrating in legalizing blockchain from the viewpoint of it as a mechanism to register data so that the information stored in blockchain will have the same legal force as information stored in other forms. The Russian move places it, along with China and the Northern European countries such as Finland and the Baltic States, ahead of the technology game when it comes to handling supply chains across Eurasia, with specific long term implications for China’s Belt & Road initiative.
“Getting Russia up to speed legally in defining blockchain technologies and how they may be implemented in supply chains is a crucial part in the next 5G wave of technology that is cutting sweeping across Eurasia from East to West”, says Chris Devonshire-Ellis of Dezan Shira & Associates, adding “Russia is a crucial part of China’s Belt & Road connectivity.”
A blockchain is a continuously growing list of records and data, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a time-stamp, and transaction data. By design, blockchains are inherently resistant to modification of the data. A blockchain can serve as an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. For use as a distributed ledger, a blockchain is typically managed by a peer to peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which needs a collusion of the network majority. Blockchains are secure by design, and this makes them suitable for the recording of events, record management, identity management, transaction processing, documenting provenance, and traceability.
“Blockchain technologies are crucial to the supply of Chinese and other products across borders to Europe and vice-versa. With one billion Chinese consumers now online, such technologies are vital for maintaining and securing Chinese and other consumer markets. Russia is a de facto land bridge between China and the EU, and blockchain technoloy is vital to ensure the smooth, documented, financial, and logistics tracking of packages and goods moving between Asia and Europe in both directions”, explains Devonshire-Ellis.
The European branch of the International Securities Association for Institutional Trade Communication (ISITC) has proposed 10 blockchain benchmarks it believes will help standardize the increasingly diverse set of blockchain tools currently available on the market. Russia and China and other Eurasian nations will be examining how these can be compatible with their proposed systems, while ISO standards to assist this transition between old and new technologies are being introduced.
“Russia will be a major player in Eurasian and Belt & Road trade”, says Devonshire-Ellis, “and this will be led by technologies such as blockchain and fintech. It is vital for Russia and the Eurasian supply chains that they are up to speed on this, and this is what is happening. There are opportunities for IT businesses in this sector within the Russian market.”
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