Banks might disappear due to the spread of blockchain technology. That is what has been voiced to the Vice President of a major Russian bank by one of its leading managers.

“In 10 years, there will be no banks, I'm afraid,” said Andrey Sharov, a top manager of Sberbank, cautioning his boss and colleagues that the current financial and credit systems might change entirely by 2026.

“Bank of England has established a consortium of 50 English banks rebuilding their banking models completely with the help of blockchain technology. I’ll have no place to work at,” smiled Sharov, apparently confusing the Bank of England with R3 consortium which has brought together 42 world banks and recently entered into a strategic partnership with Microsoft.

Sberbank is one of the few Russian financial institutions which have repeatedly confirmed their interest in the distributed ledger technology. In December 2015 Lev Khasis, Sberbank's deputy chairman, announced that the bank was studying the possibility to join R3 team in order to research and develop blockchain projects. He also highlighted the fact that blockchain had a huge potential but there were still “very few practical application examples.”

A month later the head of Sberbank Herman Gref discussed the future of blockchain at a meeting initiated by the Russian Agency for Strategic Initiatives (ASI) and held under the chairmanship of President Putin. During the meeting, Herman Gref claimed that blockchain was capable of transforming all spheres from government regulation to the financial sector. Earlier Gref had been quoted as claiming to have some bitcoins.

Russian Central Bank has also shown interest towards distributed ledger technology, launching a special working group within its structure in order to study blockchain. Late in March, the Central Bank claimed it was in process of creating some blockchain-based projects, without providing any further details.

Unlike blockchain, bitcoin is perceived by the Russian authorities as a threat to the country's national currency and financial stability. Thus, Ministry of Finance has joined its efforts with the Investigative Committee, both of them calling to impose total ban on digital currency circulation and suggesting to punish bitcoin miners with up to 7 years in jail. 

Elena Platonova