Russia’s central bank will rely on blockchain to create a united Eurasian payment area.
While the threat of UK to disconnect Russia from SWIFT is looming, Russian officials are busy figuring out possible solutions and alternatives. According to the plans of Bank of Russia, a blockchain-based single payment area is going to be created within the Eurasian Economic Union (EEU). Olga Skorobogatova, Bank of Russia deputy chair, announced:
“We are now discussing the possibility of creating new technologies for transmitting messages processing payments within the EEU area as a supranational infrastructure. This would give us the opportunity to use the distributed ledger technology at the level of the EEU area, to make settlements and transfer financial information without disrupting existing payment systems.”
This blockchain-based transfer system will be compatible with the SWIFT format. Russia will be the first country to test the system, and more countries are expected to join at the later stages of the project.
Adoption of blockchain isn’t the only way Russia is preparing for possible financial disruption. A national payment system (SPFS) has been in operation for more than two years and managed to attract a few hundred participants. The system is designed for the internal banking system only so international transfers are impossible. Moreover, companies from CIS countries are excluded from the system.
The announcement by the Bank of Russia comes on the heels of Russian government head Dmitry Medvedev’s speech about blockchain as a foundation for EEU integration. According to him, the platform will later be available to any potential partners outside the union. Medvedev stated:
“I hope that we will be able to cope with the challenges that our countries have faced in the digital age.”