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State Pension Fund plans in Russia to deploy blockchain technology

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State Pension Fund plans in Russia to deploy blockchain technology

Surprisingly, Russia’s newest institution to join the growing cryptographic community has been transformed into the state pension fund, the country’s largest public social service provider. The Fund intends to apply innovative blockchain technology in the labor and labor relations industry to manage and control all labor contract data, the local daily Izvestiya reported.

The news center cites the PFR press center that the Pension Fund aims to apply and use smart contracts as labor agreements between employers and employees. These contracts will be signed by an electronic signature that citizens can obtain from any local multi-functional center providing government and municipal services.

Currently, PFR collects and stores employer data on premiums and taxes on its central servers. However, with the implementation of blockchain technology, all PFR information systems will be integrated into a single platform based on blockchain, and all employment contracts will be registered in the reseller ledger. According to Izvestia, the Fund plans to prepare expert proposals on this issue by the end of the year.

The new technology will ensure high transparency, fast processing speed, data security and safety, all of which can help address a number of pressing issues. First, smart contracts can help get rid of excessive and unproductive paperwork. After that, blockchain technology can reduce the storage and processing costs of large databases.

Last but not least, all work agreements registered on the blockchain will be protected from unauthorized access or later modifications. This, as the fund’s officials emphasize, should protect employees from any possible fraud or malaise by suspected employers who often tend to conclude employment contracts that violate the law.

According to experts, at present in Russia, such a violation of human rights is a very sensitive issue in the market for small and medium-sized businesses, need to closely monitored. In this regard, Izvestia quotes data from the Federal Labor and Employment Service showing that in 2017, some 465,000 Russians claimed that their labor rights had been violated.

The Russian government is currently deeply involved in labor market reforms, including reform of the rudimentary pension system this summer, and demands a raise in the minimum retirement age, which has already led to mass protests in the country.

Fortunately, the news of PFR is not such. The Fund’s decision to use innovative digital technology should be beneficial to both employers and employees, who provide them with greater transparency and security. In the longer term, the Pension Fund aims to strengthen its digital program by developing it into a kind of community, offering a wide range of social services.

At the same time, Russian state authorities have already adopted new technology to solve critical tasks. Thus, the Ministry of Defense of the Russian Federation would like to use the blockchain to enhance cybersecurity and prevent hacking attacks.

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