Russia’s Largest Bank Is Quitting Central Bank’s Blockchain Project

The Takeaway

  • Masterchain, a blockchain project backed by Russia’s central bank, is falling behind on its goals two years after inception.
  • Sberbank, the leading bank in Russia, is unsatisfied with the system’s speed, security and overall efficiency after testing it.
  • The bank is looking to shift its work to other enterprise platforms, Sberbank’s blockchain lab head said.

Masterchain, the bank blockchain project developed under the auspices of the Russian central bank, is missing the mark, the project’s key participant told CoinDesk.

Sberbank, the largest bank in Russia, has decided to wind down its participation in Masterchain, said Oleg Abdrashitov, head of the institution’s blockchain lab. Calling the system inefficient, insecure and slow, Abdrashitov said his bank will shift its blockchain work to other, more widely used enterprise platforms.

“Masterchain does not satisfy the requirements for Sberbank’s use cases, so for all future exploration we will use enterprise blockchain platforms such as Hyperledger Fabric or Quorum,” Abdrashitov said.

In an interview last month, Abdrashitov offered a rare window into the discreet world of enterprise blockchain projects, where dissatisfied participants usually exit projects quietly. His candor is especially notable coming from such a large player: Sberbank commands a 50 percent share of the Russian mortgage market, the focus of Masterchain’s initial use case.

Masterchain was launched in 2017 by the FinTech Association (AFT) — an entity itself founded that year by the Bank of Russia, the country’s central bank. The blockchain project had the support of the five largest banks in the country: Sberbank, Alfa Bank, VTB, Raiffeisenbank Russia (a subsidiary of the Austrian Raiffeisen) and Otkritie.

The cost of Masterchain’s development is not public. However, according to earlier public disclosures, the 13 members of the Fintech Association are paying $120,000 to $230,000 a year to…

Source Link