A local Russian news outlet reported recently, that Herman Oskarovich Gref, the CEO and chairman of the executive board of Sberbank, Russia’s largest bank, said that cryptocurrencies might not have a good chance of achieving mainstream adoption as the US is not ready “to part with the centralized money supply model.”

Gref’s comments came during the three-day Finopolis Forum of Innovative Financial Technologies conference, which was held in Sochi, a Russian city on the Black Sea. The former Minister of Economics and Trade also said that blockchain technology has the potential to be further developed as it may have many legitimate use cases.

Gref added that he would prefer a “distributed model” for most types of business processes, including the circulation of the global “money supply.” However, he thinks no sovereign state is ready yet to part with ”the centralized money supply model.”

“Distributed” Registry May Offer “Tremendous Opportunities”

Going on to explain why he believes distributed ledger technology (DLT) would be useful, Gref noted that the idea of having a “distributed” registry, or transaction log, would offer greater transparency – which may provide “tremendous opportunities.” At this point, however, Gref said blockchain technology has not matured enough “to be fully used” to its true potential.

When questioned about when he expects DLT-based systems to become useful at the enterprise level, the Russian politician said:

[Blockchain] technology is not ready now. When will it be ready? In my opinion, three to five years. If you ask me in five years, maybe I can say something more accurate about its place, but the potential is huge. The philosophy that it has proposed, fundamentally changes many approaches to conducting business. Improving DLT technology will give huge value for business and for society.

Herman Oskarovich Gref

As mentioned, Gref has expressed confidence regarding the future adoption of blockchain to improve various routine business procedures, however he is not so sure whether cryptocurrencies will be as widely used. He explained: 

Now that the ‘hype’ has ended, a more balanced consideration and evaluation of this technology has begun. We are basically developing and are experimenting with technology. I see that, in particular, in the financial sector and in public administration this technology has great prospects.

Herman Oskarovich Gref

Comparing Crypto To “Late 1970s Internet”

Gref also said he was concerned that a “ban on cryptocurrency” could adversely affect the business operations of many promising startups that have been making valuable contributions toward the ongoing development of DLT-based systems.

He added that authorities should take a more balanced approach to regulating cryptocurrencies, in order to not stifle innovation. As CryptoGlobe reported on October 17, Dr. Neha Narula, the MIT Media Labs director, said during a conference hosted by Wired that cryptocurrencies may not necessarily evolve to the point that they could become useful for daily transactions.

Narula also compared the current state of crypto-related technology to that of the internet in late 1970s – just before the introduction of the TCP/IP protocol.

Note: Some statements in this article were translated from Russian.