Rostec, a state-run tech corporation in Russia, announced that it will cut its budget for blockchain development by 50%.
The company recently released a new roadmap which shows that the corporation plans to spend $453.2 million on developing blockchain technology in Russia by 2024. However, the original budget intended to spend $1.3 billion for blockchain development.
Reported by Russian news platform Kommersant on Jan. 27, the corporation revealed the details of the budget. Implementing blockchain to product labeling systems costs $10.3 million and to the healthcare system $18.6 million, out of which $9.1 million will be used for a counterfeit tracking system for pharmaceutics. Moreover, implementing blockchain in the housing and utility service requires $7.5 million.
Blockchain development impact on macro-economics turned bearish
The changes to Rostec’s blockchain budget were made after the company made a reassessment of how the technology would impact Russia’s economy. While previous assessments have shown a significant impact that would require larger investments, the new version shows a bearish forecast.
A representative from Rostec claimed that the perception of blockchain technology has changed, indicating “a self-cleaning of the market from copy projects that do not have a development strategy and a certain market niche.” At the moment, the Russian blockchain market chose a path that provides ‘less risky development.’
Uncertain adoption rate following recent development
The state of blockchain adoption in Russia initially seemed to take a better turn as Mikhail Mishustin recently became the new Prime Minister of the Russian Federation. Relatively unknown to the public, Mishustin is a Russian economist and politician who previously served as Director of the Federal Tax Service.
After President Vladimir Putin decided that the nation requires major constitutional changes, he suggested Mishustin to the Duma as the new PM. As Mishustin previously worked on digitalizing Russia’s tax system, many believe that he will introduce blockchain tech to many industries in Russia.
However, the latest development shows a great deal of uncertainty for the country’s future blockchain development. If Russia’s government or president do not take the role of bringing blockchain technology to the country, Rostec’s roadmap which lasts till 2024 might not be enough to compete with other leading countries such as China and the U.S.
As CryptoPythia previously reported, Chinese entrepreneurs started the year with more than 700 new blockchain companies. With the introduction of a blockchain infrastructure project called BSN in April, we expect a parabolic curve for blockchain adoption in China.