The first deputy governor of the Central Bank of Russia (CBR) recently spoke in an online meeting reported by Russia Today (RT) on the subject of digital currencies challenging and making SWIFT’s international payments system obsolete.
Digital currencies could challenge and even replace the SWIFT system
According to Olga Skorobogatova, the development of digital coins is making international bank payment systems a topic of discussion, so such traditional logic may be out of date.
She backed up her comments with the fact that over 30 financial regulators “are currently working on their national digital currencies”. She also believes that several countries could launch their cryptos in the next 5-7 years. Skorobogatova said:
Then we can deal with questions of direct integration. In this case, SWIFT may not be required as it is a different type of technological interaction. However, the global banking network can become one of the platforms for the new form of national currencies.
However, in order to achieve full digital currency integration, the deputy governor of the CBR believes that the security of the technology behind cryptocurrencies should be fully assured before considering adopting a new global transaction network.
An alternative crypto-based global payment network to evade sanctions?
RT’s report also adds to Skorobogatova’s words that Russia is working to respond to ongoing threats to evict the country from the SWIFT system, as “some Western politicians have threatened Russian banks off the network as part of a series of sanctions to separate”.
The SWIFT system is used by 11,000 financial institutions in more than 200 countries to arrange cross-border payments. However, the main disadvantage of processing transactions over such networks is the slowness and the costly costs involved.
The Russian central bank is working on its own CBDC, the digital ruble, as it plans to launch a series of tests similar to those of China.
Five Russian banks have already expressed interest in participating in the CBDC pilot project: Credit Bank of Moscow, Promsvyazbank, Bank Zenit, Dom.RF and the Russian National Commercial Bank. The State Duma, the federal assembly of the Russian lower house, expects the experiment with the digital ruble to begin in the first half of 2021.
Do you agree with the words of the deputy governor of the CBR? Let us know in the comments below.
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