Tech Firm in Russia to Cut Blockchain Spending by Half

Tech Firm in Russia to Cut Blockchain Spending by Half

Russian state-run Rostec is reportedly planning to cut spending on the blockchain development by half.

The organization plans to spend up to 28.4 billion rubles ($453.2 million) by 2024 on developing blockchain technologies in Russia instead of the 55-85 billion rubles ($877.8million-$1.3 billion), according to company’s plan that was reported by domestic newspaper.

The organization outlined that incorporating blockchain software into the labeling system would require 650 million rubles ($10.3 million), into the healthcare system 1.17 billion rubles ($18.6 million), of which 575 million rubles ($9.1 million) will be allocated to the counterfeit and pharmaceuticals consumption tracking system. In the housing and utility sector, the implementation of blockchain would potentially require 475 million rubles ($7.5 million).

Rostec revised their estimation of the potential direct and indirect economic effect of the country’s blockchain growth, although earlier versions of the plan indicated significantly greater technology investment. The downgraded economic impact forecast is theoretically subject to the change in macroeconomic conditions.

A spokesperson stipulated that there is currently a shift in the perception of technology, ” a self-cleaning of the market from copy projects that do not have a development strategy and a certain market niche,” while the market is evolving most smoothly under these conditions and is choosing the “less risky development” direction.

The company sent the document for approval to the Russian government’s Ministry of Communications and Analytical Center. It is worth mentioning that, the move follows the appointment of the Russian Federation’s new prime minister, Mikhail Mishustin, who called on the country to prioritize digital economy growth.

Earlier this month, Russia’s Rosatom Company has launched a 30-megawatt mining facility, 200 miles northwest of Moscow.

Rosatom has spent over $4.8 million at building the plant that will be used in generating the electricity needed for Bitcoin mining. It will sell additional electricity to heavy users and rent space for their systems.

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