For a country that produces so many digital currency pioneers, you could argue that Russia appears to be somewhat late to the blockchain technology game.

While no end of Russian blockchain entrepreneurs have made a name for themselves elsewhere in the world, the state appears to have been dragging its heels. Indeed, consider that Russia is seemingly surrounded by (albeit fledgling) blockchain success stories in places like Estonia, as well as Georgia and Kazakhstan. But 2017 appears to be the year when all this changed – Russia’s executive branch has pushed forward a wide array of policies that could see many of its public operations put onto blockchain platforms.

The results could be transformative – doing away with decades of outdated, corruption-prone Soviet-age bureaucracy in favor of networks of high-tech, tamper-proof digital ledgers.

Although the Kremlin’s line on digital currencies seems inconsistent at best (and perhaps deliberately obfuscated at worst), Vladimir Putin and his cabinet seem to be in complete accord when it comes to blockchain adoption.

Both Putin and former president Dmitry Medvedev (now prime minister) have been singing blockchain’s praises for some time. However, in the past few months, the ball has really started to roll.

Property, pensions and more

The government’s first big move was to announce a blockchain-powered property registry pilot scheme in Moscow, which will begin in January 2018 and run for six months.

However, it appears that this is just the start. Medvedev is reportedly now working in close conjunctionwith Russia’s Ministry of Telecom and Mass Communications, in doing so receiving a wide range of proposals. These include potential blockchain platforms for state pensions, mortgage, subsidized medicine and even the country’s timber industry.

Interfax reports that if Medvedev approves, the government will move fast to pass laws that will allow the ministry to press ahead with its schemes.

There is also talk of creating some sort of wide-scoped, central, state-run cloud platform, replete with a government-approved cloud electronic signature system – also possibly leveraging blockchain technology.

Crimean advances

Although Moscow may be the first to feel the benefits of any such scheme, the government is keen to launch blockchain schemes all across the nation – with some are even mooting its use on the disputed Crimean peninsula.

Much of the West considers Russia’s controversial acquisition of Crimea in 2014 to be little more than a land grab on the Kremlin’s part. The area’s economy has nosedived since international sanctions were imposed, preventing international banks from operating in Crimea. However, Russia has high hopes for its Black Sea territories, and may even attempt to foster international investment in the area using blockchain technology.

Speaking at the Friends of Crimea Forum in Yalta this month, the Honorary Consul of Russia in Switzerland Karl Eckstein claimed that blockchain-powered investment platforms could allow international investors to put their money into the region’s tourism industry – and enjoy anonymity when doing so.

Eckstein said, “It’s possible to envisage a platform that would let investors put their money into projects, without anyone knowing who was investing. As such, these investments would be completely anonymous. I think that if Crimea ran a blockchain project along these lines, it would be well-received, and there would be plenty of willing participants.”

Eckstein is not alone. Prominent blockchain enthusiast and possible presidential candidate Boris Titov has spoken of creating a Zug-styled Crypto Valley in Crimea, as part of an effort to attract financial capital to the region.

This is all going on while Crimea pilots a blockchain-powered smart energy grid initiative. The scheme is being run by payment system operator and digital currency pioneer Qiwi and Tavrida Electric, a smart grid supplier.

Banking on blockchain

Russia’s financial sector is equally enthusiastic about potential blockchain advances – including the central bank, whose Deputy Chairwoman Olga Skorobogatova now heads its blockchain operations.

Skorobogatova last month explained, “We’ve conducted thorough analysis that has led us to believe that blockchain technology can be beneficial to Russian society, finances and industry. We are currently running pilots with a number of Russian banks.”

Indeed, Skorobogatova and the central bank seemingly envisage a future whereby they play the role of regulators for the entire country’s blockchain technology-related business development.

Per media reports, the central bank is also running an Ethereum-based blockchain pilot for processing online payments and authenticating customer data.

In the private sector, two of Russia’s leading banks, Vnesh Econombank (VEB) and Sberbank, have also turned their attention to blockchain technology ventures.

Earlier this year, Sberbank president Herman Graf predicted that commercially available blockchain platforms would be commonplace in Russia by 2019. He also claimed that Medvedev and his First Deputy Prime Minister Igor Shuvalov were personally working to ensure this.

Graf was quoted as saying, “[Medvedev and Shuvalov’s involvement] is a huge step forward from the state in terms of using this technology. I believe it will change everything – for literally every industry.”

Sberbank has also become the first Russian bank to join the Enterprise Ethereum Alliance (EEA), one of the world’s biggest open-source blockchain collectives.

VEB, meanwhile, is now running a blockchain initiative with Ethereum founder Vitalik Buterin. The bank has also launched a joint healthcare pilot scheme with the Novgorod city authorities. The scheme will be used to monitor medical prescriptions in the city and surrounding areas, and integrates “electronic prescription, drug labeling subsystem and the resources of Ethereum platform” per Novgorod’s regional governor.

Bureaucracy buster

Critics might well point out that talking about blockchain and tentatively launching a few pilot schemes is not enough – and that Russian state has achieved relatively little in the way of concrete results thus far.

However, the process of changing the way the entire country does business can be no overnight job. Old habits die hard in a nation still deeply mired in Soviet-era red tape. But the fact that Medvedev now seems to have carte blanche to approve blockchain-related legislation shows that the government believes going in hard on blockchain technology is now its best technology policy.

And it is very telling that an all-Russian IT conference held in Russia’s subject republic of Tatarstan a few months back chose to rather ambitiously title itself “Blockchain: Russia’s New Oil.”

By Tim Alper via Crypto Insider