Will Russia rely on blockchain to replace SWIFT?
Russian banks last February have been excluded from the SWIFT interbank payment system by decision of the international community. The maneuver was intended to speed up the resolution of the war in Ukraine by choking Russia economically.
But four months later, the situation got bogged down and Russia is apparently trying to develop alternatives. The government organization Rostec, which brings together several local tech companies, announced this month that it was developing a system to enable international bank payments. This type of solution already exists, particularly in China. The country launched its international interbank payment system in 2015, called CIPS.
👉 To go further – What is the blockchain?
Distributed ledgers and digital wallet
In Russia, the current project is called CELLSand presumably it will be based on blockchain. According to a statement from Rostec, the system, developed by the Novosibirsk Institute of Software Systems (NIPS), will use distributed ledgers that will support various fiat currencies.
However, CELLS will go beyond SWIFT: it will allow its users to create wallets for storing digital currencies, according to the press release. In terms of capacity, Rostec is aiming for 100,000 transactions per second, at least initially.
👉 Related – US Department of Treasury Sanctions Bitcoin (BTC) Mining in Russia
A U-Turn for the Russian Government?
Those last few weeks, we feel the tide is turning in Russia on the side of technologies associated with the blockchain. Earlier this year, the country’s central bank was once again hostile to the sector, even suggesting that cryptocurrencies should be banned altogether. The Duma, for its part, was more measured, but not particularly open to the subject.
Would that change? While Ukraine has integrated a cryptocurrency strategy since the early days of the conflict, Russia may follow suit. Last May, a member of the Ministry of Finance explained the following:
” The idea of using digital currencies for the settlement of international transactions is actively discussed.“
The Central Bank follows suit
This was also confirmed by a surprise reversal of the governor of the Bank of Russia, Elvira Nabiullina. Historically very anti-crypto, last week he told our RBC colleagues that cryptocurrencies could be used for international payments. On one condition, however: that the latter are not integrated into Russia’s internal financial system. Nabiullina explained thus:
” Cryptocurrencies should not be traded on organized exchanges, as these assets are too volatile, too risky for potential investors. “
Too risky then for investors, but not necessarily to support the Russian economy, which now suffers greatly from its international isolation? This admission by the country’s Central Bank shows that even in Russia, things are changing.
👉Read also – Russia: Cryptocurrency miners consume more than 2% of the country’s electricity
Sources: Rostec, Reuters, RBC
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