On February 26, 2022, two days after the start of the Russian invasion of Ukraine, the Western countries’ sanctions package provided for the exclusion of certain Russian banks from the global SWIFT payment messaging network. A sanction which implies that banking transactions between Russia and the member countries of the network will become impossible. But it will not greatly affect Russia’s trade with its economic partners. In 2014, as tension over Crimea’s annexation ran high and Russia was bombarded with sanctions, Moscow introduced the Financial Message Transfer System (SPFS). It is an equivalent of the SWIFT network, which has 70 organizations in a dozen countries. We learn that cryptos, especially bitcoin (BTC) are also used in Kremlin payments. To permanently bypass SWIFT, Vladimir Putin has an idea.
A blockchain-based system independent of outside interference
On November 24, during the Artificial Intelligence Conference in Moscow, President Vladimir Putin critical Western sanctions. His criticisms related, among other things, to the exclusion of Russia from the global SWIFT network. As a reminder, the SWIFT network was developed by several major powers, including Western countries. This is why the Russian leader called for the creation of an independent international payment system. According to him, the new system must be on the blockchain and must not be subject to any outside interference.
“Blockchain technology can be used to create a new system of international settlements. This system will be much more convenient, absolutely safe for its users. Above all, it will not depend on the banks or the interference of third countries. I am confident that something like this will definitely be created and grow. Indeed, no one likes the diktat of the monopolies, which harms all parties, including the monopolies themselves”, said Vladimir Putin. And to continue: “The current system of international payments is expensive. Its correspondent accounts system and regulations are under the control of a tight club of states and financial groups.has note the Russian president.
Russia is already preparing!
This is not the first time that this idea has been talked about in the Kremlin. Last June, government sources reported the existence of a project to create a platform called CELLS. This will gain a foothold on the blockchain and will allow the country to completely get rid of the monopoly of the SWIFT network. The idea could also be of interest to many countries around the world, according to analysts.
This development comes seven days after the introduction in parliament of a law on the legalization of crypto mining and the sale. Chairman of the State Duma Committee on Financial Markets Anatoly Aksakov believes that “Passing the law will bring this activity into the legal realm and establish a law enforcement practice on issues related to the issuance and circulation of digital currencies.”
Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of daily and weekly so you don’t miss any of the essential Tremplin.io!
