Russia to Replace SWIFT with Blockchain Payment System

Rostec Group is a government organization in Russia that occupies various technology companies. The organization has announced that it has developed a blockchain platform to establish a digital system for international payments that can replace the global SWIFT system. 

Russian banks refrained from the SWIFT system last February thanks to sanctions imposed by Western countries in response to the Russian-Ukrainian war. Since then, Moscow has been searching for another financial payment system to replace SWIFT to protect its foreign trade transactions. 

The digital system of international payments will enable Russia to pay for its imports in its national currency, the Ruble, instead of the US dollar. Moreover, as per the Rostec group, the new system will enable foreign countries to pay for imports from Russia in their national currencies. 

Why is the Global Payment System – CELLS created?

Rostec’s stated that the blockchain platform on which the international payments system is working, called CELLS, was made by the Novosibirsk Institute of Software Systems (NIPS), which is in turn affiliated with the Rostec Group. The platform is designed to deliver an integrated system established on distributed ledger technology.

As per the Russian group, the platform contains a digital system for facilitating payments in the countries’ national currencies among its central components.

What does the company claim?

The company claims that its new system “could provide a real option to the international payment services delivered by the SWIFT system.” from which Russian banks have been secluded under Western sanctions.  

Furthermore, the international payments services, the CELLS platform, allow users to set up wallets to store digital currencies, per the company’s statement.

What did the CEO of the Rostec Group say? 

CEO of the Rostec Group – Oleg Yevtushenko, pledged that the latest international payment system would confirm “high speed and secure transactions,” saying that the new digital system can deliver about 100,000 transactions per second, with the probability of doubling this number. 

Yevtushenko also described that the payment feature in local and national currencies offered by the new system would allow users to circumvent Western sanctions imposed on Russia. 

The Rostec group emphasizes large companies with commercial relations with Russia, foreign government authorities that do business with Moscow, financial institutions, and banks. 

How has Russia’s position on cryptocurrencies shifted? 

The announcement of the new system comes a few days after the Russian government said it was considering adopting cryptocurrencies in international payments. 

The Russian Central Bank (RCB) presented last January to ban the introduction and use of all cryptocurrencies. There are arguments within the Russian government about using cryptocurrencies in international trade settlements, said Ivan Chepskov, head of the Financial Policy Department of the Russian Finance Ministry. 

Will this plan reach its desired conclusions?

It is considered a shift in the Russian position on cryptocurrencies, as the Russian Central Bank had cautioned earlier this year of the threats to the country’s financial system. Moreover, it was claimed that crypto undermines the sovereignty of the country’s monetary policy. 

Lastly, in contrast, the legal status of cryptocurrencies in Russia stays in flux, and previous efforts to legalize them have not yielded results. Nevertheless, the government is pressing to allow them to attract foreign investment and get domestic trade out of the shadow of Western sanctions.  

Author: Abhishek Kumar

A self-believer who loves to learn and spread the light of wisdom in his community. You could find him writing about finance, cryptos, and marketing. Moreover, he loves to read non-fiction and drink non-alcoholic drinks.

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