Blockchain activities in RussiaMaksim ShevchenkoAlexey UrivskiyRussian Technical Committee for Standardization TC 26

©2017 Russian Technical Committee TC 26

General overview

Lack of desired level of legal framework, including

legal significance

Standard solutions and cross-border exchange

Issues to solve (Russia’s view)

Key management infrastructure

Consensus protocols

Security

Major projects are now at the preliminary steps

Russian experts expect to see commercial systems in 1,5 – 2 year period

Main area to real implementation – financial sector

©2017 Russian Technical Committee TC 26

Prohibit vs StudyA lot of discussion about blockchain in general and Bitcoin in particular since 2008-2009: Initial discussion on cryptocurrencies and their

legislative regulation 1st initiative of the Ministry of Finance: PROHIBIT

o penaltieso stop company activitieso block cryptocurrencies turnover

2nd step: STUDYo Parliament of Russiao National Bank and the financial communityo Technical Committee for Standardization

TC 26 “Cryptography and security mechanisms”

Newtechnology

Risks

ThreatsInnovation

Benefits

©2017 Russian Technical Committee TC 26

Lower House of the Russian Parliament 2016: WG on cryptocurrencies turnover,

blockchain and legislative regulation:o transactions verification;o legal field for smart contracts;o activity licenses for companies using

blockchain;o technology standardization and

certification. Legislative initiatives by the end of 2017 April 2017 Forum

“Blockchain: Business – Government dialogue”

©2017 Russian Technical Committee TC 26

Central Bank of RussiaPrerequisites of the interest

Needs to offer new financial services and shortcut mediators number

Security issues raised by the increasing complexity of traditional systems

Lack of trust between market players. National bank have to moderate all activities

FinTech Association:

National Bank + leading Russian Banks

Goal: developing & implementation of new financial technologies

Projects (blockchain and distributed ledger based):

o Financial Messages Exchange System

o MASTERCHAIN

©2017 Russian Technical Committee TC 26

MASTERCHAINBlockchain-based unified network to exchange and store financial data.

Masterchain will allow financial market players to unite and provide them the infrastructure for effective and rapid implementation of new innovative financial services.

Planned application: Platform and technical features

• Financial messaging• No third party involved

transactions• Mortgage transactions

• Etherium• Basic and Color tokens• API • Certified Crypto libraries

implementation

©2017 Russian Technical Committee TC 26

Financial market players activityReference Short description Known limitations

Qiwi qiwi.com Blockchain based processing

• Testing stage

• Private blockchain for each system

• No interoperability

Otkritie Bank open.ru Know your client (KYC) without transferring personal data

Sberbank sberbank.com

Several prototypes to control integrity and deal docs availability at the specific time. Hashes are stored in blockchain system

Alfa-bank alfabank.com

Several prototypes to control integrity and deal docs availability at the specific time. Hashes are stored in blockchain system

©2017 Russian Technical Committee TC 26

ExamplesFederal Antimonopoly Service

Electronic document managementGoal: To rise up the speed. Robustness and quality of the service during document managementStatus: Study and technology testing.

RosreestrThe Federal Service for State Registration, Cadastre and Cartography

Realty deals registration in blockchain systems

Status: Research started in March 2017

VTB BankShareholders ledger

Goal: Unified System to store records about shareholders of companies in the distributed ledger

Status: Prototyping.

©2017 Russian Technical Committee TC 26

Examples (cont.)Saint Petersburg University of the Information technology, mechanics and optics, www.itmo.ru

Autonomous system to control flying drones

Based on Ethereum

Goal: To provide drones as a service

Party ROSTAhttp://blockchain.rost.ru

Develop network area for social activity

Cryptocurrency “Upcoins” is used to pay for loyality or services

Counterfeit protection

Systems for Counterfeit protection are implemented, e.g. Alcohol and Furs

Blockchain and distributed ledger technology could be used to:

- log all significant steps of product lifecycle - build transparent supply chain- involve all participants in one system (manufacturer, end-user, distributor, customs, taxes authorities, etc.)

©2017 Russian Technical Committee TC 26

Examples (cont.)Siberian Chervonets cryptocurrency – SIB

Based on hash-function Streebog –the Russian national standard

More than 5200 master-nodes in the network –the second largest network after Bitcoin

SIB/BTC trade on Bittrex

©2017 Russian Technical Committee TC 26

Conclusion Blockchain and distributed ledger technologies show prospects

to be useful for various applications

Detailed research is needed to investigate the real advantages and benefits, especially on non-financial markets

There are some critical issues to be solved to make these technologies successful worldwide:

o terminology

o basic aspects of operation, use cases, interoperability, etc.

o developing standards and reference solutions

o security

©2017 Russian Technical Committee TC 26

Technical Committee for Standardization TC 26 “Cryptography and security mechanisms”

BlockchainDeveloping

ISO / TC 307

TC 26 WG “Blockchain and distributed ledger security”:

Terminology / Security / Technology standardization in general

6th Workshop on Current Trends in CryptologyDiscussion “Blockchain: market expectations and experts’ opinions”June 5-7, Saint Petersburg, Russia, www.ctcrypt.ru

©2016 infoTeCS

Thank you!