Monday, 01 June 2020

Russia Implements Blockchain Technology in State Governance

In a first for blockchain usage in Russia, the governor of the Nizhny Novgorod Oblast, a Russian city, has announced that this region will begin applying distributed ledger technology in state governance.
Media sources reported on this development on May 30, 2019, with an interview from the Oblast’s governor Gleb Nikitin.

“Thanks to the cutting-edge technology,” Nikitin said, “our people will be able to engage in managing their city more efficiently via so-called participatory budgeting. Blockchain will allow us to ensure maximum transparency and honesty for the relationship between a citizen and the state.”

The plan for the Nizhny Novgorod Oblast involves a newly developed app, called Gorod N, which will be available on the Russian-based Vostok blockchain platform. Through a cooperation with federal e-governance services, Gorod N is able to verify the identities of users as Oblast citizens and store this information on the blockchain for a smoother trustless system.

As an initial test to determine the viability of this distributed ledger use case in Russian government, the only current advantage that this app provides is the ability for verified citizens to determine what budgetary expenditures their own taxes will pay for. With success in this department, the app may expand its services in the future.

This is not the only experiment Russia has made with blockchain technology in recent months. On April 28, 2019, it was announced in local media that the federal government will allow the creation of four “regulatory sandboxes” to experiment with novel applications of blockchain and other technologies in ways that are not currently protected by federal law. In addition to two oblasts with relatively low populations, this experimental phase also includes the Russian capital of Moscow and the port of Kaliningrad on the Baltic Sea, near Poland.

The fact that Nizhny Novgorod is not included in this list of regulatory sandboxes, yet is also moving forward to show a friendliness to distributed ledger technology, could reveal promising changes for the future of the Russian blockchain space. Hopefully, successful tests in this field will result in more widespread adoption in the country.

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