Russia is ‘Considering’ Blockchain Tech for Real Estate
Russian authorities are looking into the possibility of registering real estate and housing projects on a blockchain.
According to a regional report, the Russian Ministry of Communications is considering the use of blockchain technology for agencies including the Federal Registration Service, a federal executive body that records registration of rights to real estate and all related transactions.
Speaking to reporters, Nikolai Nikiforov – head of the Ministry of Communications of the Russian Federation stated:
We are considering the use of blockchain in the work of such agencies as the Federal Registration Service. Automatic real estate transactions, in particular, are considered as a pilot project for the use of blockchain in transactions related to equity construction and joint housing development.
A similar effort is already taking shape in Japan, where the government is looking to consolidate all real estate data into one viewable data record on a blockchain.
On a state level, The Russian government is notably looking at regulating blockchain technology by 2019. “One of the breakthrough technologies is blockchain,” stated Russian Prime Minister Dmitry Medvedev in a meeting with government vice-premiers this year. “This tool is already used by large banks, corporations and even some countries,” the former Russian president stated.
In October 2016, the Bank of Russia, the country’s central bank, developed a blockchain prototype dubbed ‘Masterchain’ for the financial market. The platform, based on an Ethereum blockchain, was devised a SWIFT-like financial messaging platform for banks in the Russian financial system.
Notably, Russia is also considering the use of blockchain technology for the country’s national payment system.
Earlier this year, the chief executive of Sberbank, Russia’s largest bank, claimed commercial applications of blockchain technology are to be expected by 2019.
The Russian state’s embrace of blockchain technology coincides with a remarkable pivot in its stance against digital currencies like bitcoin. In April, Russia’s deputy finance minister – who notably led the charge to criminalize the adoption and/or mining of digital currencies over several years – revealed the government was looking into recognizing and regulating bitcoin in 2018.
More recently, the Bank of Russia has joined a number of other central banking counterparts around the world to develop its own national digital currency, issued by the authority.
Japanese banking giant Mizuho has completed and revealed details of a trade finance transaction between Australia and Japan over a blockchain.
Mizuho, one of Japan’s three ‘megabanks’, has completed a blockchain trial of a trade transaction involving an export of a shipment of goods from Japan to an Australian importer. “All related processes, from issuing the letter of credit to delivering trade documents were completed entirely via a digital platform using blockchain,” the banking group’s FinTech arm revealed [PDF]. The transaction also saw participation from insurer Sompo Japan Nipponkoa Insurance and the Marubeni Corporation, a Japanese trading conglomerate.
In drawing its conclusions, Mizuho underlined the benefits and hurdles of a blockchain-powered trade finance transaction.
Reduced times in the delivery of trade documents, from multiple days to a relatively-meager 2 hours is a significant advantage. As is the reduction in costs including labor due to document digitization. Blockchain technology’s core characteristic of increased transparency, offering a real-time snapshot of a transaction for participants is also seen as a benefit.
Among the drawbacks is the obvious hurdle of ntheot being able to transmit trade information to parties who haven’t yet adopted or begun using blockchain. Further, Mizuho also cited the importance of introducing international blockchain standards.
“Building on this trade transaction project, Mizuho aims to further explore the practical business application of blockchain/DLT and to offer technologically sophisticated, client-focused services going forward,” the banking group added in summation.
Mizuho has – much like its Japanese banking counterparts – trialed blockchain solutions in the past. A 3-month trial of securities transactions over a blockchain that concluded in February 2016 saw Mizuho claim it was “practically impossible to tamper with transaction histories” while shortening the timespan for cross-border securities from “three days to same-day settlement.”
Mizuho, notably an investor in Japan’s biggest bitcoin exchange bitFlyer, completed trials of its own digital currency earlier this year. The banking group partnered technology giant IBM to develop the digital currency in mid-2016. In December, the bank conducted a real-world experiment of using its digital currency to pay for a group dinner party at a restaurant.