New Blockchain Alternative to Ensure Russia's Financial Connectivity
A Russian
university is set to test its blockchain-based equivalent to the global payment
messaging network SWIFT. Russian banks were cut off as part of Western
sanctions due to the invasion of Ukraine. The developers say their system would
ensure the connection of countries and banks.
SWIFT Substitute Developed by Russian Developers
Experts from
the Competence Center of the National Technology Initiative at St. Petersburg
State University in Russia have announced a trial run of a new inter-bank
payment system as an alternative to SWIFT. Major Russian banks do not
have access to SWIFT as a result of the financial restrictions imposed over
Moscow’s decision to invade Ukraine.
"The
pilot version of the decentralized inter-bank financial messaging system is ready
for testing and can be used in banks," the university said in a statement.
The team behind the project has used blockchain technology to create the platform.
The Center’s
technical director, Alexander Kireev, said that preliminary testing showed good
results. The transfer speeds currently exceed 25,000 messages per second at one
node, and the network’s capacity can be increased in the future.
Russian
crypto news outlet Bits.media reported that the platform can scale up and
integrate new financial institutions. Sources have revealed that it would be
impossible to disconnect any participating state or banking institution as each
client would have the same rights and access.
The
developers’ team said using a distributed ledger to exchange cross-border
financial messages allows for secure and reliable transactions. This is the
second blockchain-based project in Russia to replace SWIFT, following the
announcement in June of a similar platform designed to facilitate international
settlements between Russia and its partners by the state-owned tech giant Rostec.
Russia also
has its more traditional equivalent to SWIFT, the System for the Transfer of
Financial Messages (SPFS), which was launched after the annexation of Crimea in
2014. A report reveals that about 70 clients from a dozen countries are already
connected to the SPFS. Rostec’s CELLS platform is also intended to enable
international payments and multicurrency transactions with a digital currency
storage facility.
The Russian
Federation is increasingly cut off from the global financial system due to the
ongoing military intervention in Ukraine. It has also badly affected the country’s
foreign currency reserves. Moscow has been trying to transition to payments in
national currencies with its trade partners while
also considering the possibility of using cryptocurrencies for
international settlements.
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