Source: iStock/Savushkin

The state-sponsored Russian technology firm Rostec aims to halve its blockchain research and development fund and now estimates smaller effects on the economy.

The company stated that it plans to spend RUB 28.4 billion (USD 453.2 million) on blockchain technology by 2024, Kommersant reported, citing Rostec. This figure is a far cry from the May report, which suggested sums from RUB 55 billion to RUB 85 billion.

The company also made clear that its forecast for blockchain economic impact is substantially less than previously thought (RUB 1.1 trillion, compared with RUB 1.64 trillion in May 2019).

The new spending plan has to be approved by the government.

The main sectors where blockchain technology might find inroads are medical and housing data. Of particular note, the company detailed a plan for blockchain technology to track pharmaceuticals.

While Rostec had previously believed that the nascent technology would offer substantial improvements over legacy systems, the truth has left much to be desired. Instead, Nikolai Komlev, director of the Association of Computer and Information Technology Enterprises made clear that the technology can only accomplish simple tasks, but at vastly greater cost, the report said.

Also, according to Mikhail Zhuzhzhalov, a lawyer at Deloitte Legal in the CIS, the technology is still imperfect and requires substantial improvements before implementation would be prudent.

The government of Russia has been open to embracing blockchain technology, but cryptocurrencies are something of a bellwether for the nation. While still ‘not illegal’, the government is working on draft legislation that would allow the authorities to confiscate cryptocurrency.

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