Russia: Development of blockchain system to replace Swift
The Rostec Group is a government-owned corporation that owns a number of technology companies in Russia. They have announced that they have built a blockchain platform to launch a digital system for international payments that could eventually replace the global Swift system.
Due to sanctions imposed by Western countries in response to the Russian-Ukrainian conflict, Russian banks were kicked out of the SWIFT system in February. Since then, Moscow has been looking for a financial payment system to replace SWIFT in order to protect its international trade transactions.
Russia will be able to pay for imports in its national currency, the Ruble, rather than the dollar, thanks to the digital international payment system. The new system, according to the Rostec group, will also allow foreign countries to pay for their imports from Russia in their own currencies.
The CELLS blockchain platform, on which the international payments system was built, was developed by the Novosibirsk Institute of Software Systems (NIPS), which is affiliated with the Rostec Group, according to a statement released by Rostec.
The platform is intended to provide an integrated system using distributed ledger technology.
The platform includes a digital system for making payments in the national currencies of the countries associated with it, according to the Russian group.
According to the company, its new system "could provide a real alternative to the international payment services provided by the SWIFT system," from which Russian banks have been cut off due to Western sanctions.
According to the statement, the CELLS platform offers its users the ability to create wallets to store digital currencies in addition to international payments.
The new international payment system, according to Oleg Yevtushenko, CEO of the Rostec Group, will ensure "high speed and secure transactions," with the new digital system capable of performing 100,000 transactions per second, with the capacity to double this number.
Yevtushenko also stated that the new system's payment feature in local national currencies will allow users to avoid Western sanctions against Russia.
The Rostec group is after large corporations with commercial ties to Russia, as well as foreign government agencies that do business with Moscow, and financial institutions and banks.
The new system was announced just a few days after the Russian government announced that it was considering using cryptocurrencies in international payments. Last January, the Russian Central Bank proposed banning the introduction and use of all cryptocurrencies.
The idea of using cryptocurrencies in international trade settlements is being discussed within the Russian government, according to Ivan Chepskov, head of the Russian Finance Ministry's Financial Policy Department.
The Russian Central Bank had warned earlier this year about the risks to the country's financial system, so this is seen as a shift in Russia's stance on cryptocurrencies. Cryptocurrency is said to jeopardize a country's monetary policy sovereignty.
In Russia, on the other hand, the legal status of cryptocurrencies is still in flux, and previous attempts to legalize them have failed. The government is pushing for them to be allowed in order to attract foreign investment and remove domestic trade from the shadow of Western sanctions.
By fLEXI tEAM