The first deputy governor of the Central Bank of Russia (CBR) has been speaking at the most recent online conference reported by “Russia Today” (RT) on the topic of digital currency, which challenges the SWIFT international payment system and makes it redundant. More.
Digital currency may challenge or even replace the SWIFT system
Olga Skorobogatova believes that the development of digital coins has made international bank payment systems a topic of discussion, and this traditional logic may become obsolete.
She supports comments about the fact that more than 30 financial regulators are “currently developing their national digital currency.” In addition, she believes that some countries may launch their cryptocurrencies in the next 5-7 years. Skorobogatova said:
Then, we can deal with direct integration issues. In this case, SWIFT may not be necessary because it will be another way of technical interaction. However, the global banking network may become one of the platforms for a new form of national currency.
However, in order to achieve the full integration of digital currency, the Deputy Governor of CBR believes that the security of the technology behind encrypted currency should be fully protected before considering the launch of a new global transaction network.
Another encryption-based global payment network can bypass sanctions?
The RT report also added Skorobogatova’s statement that Russia is struggling to deal with the constant threat of escaping from the SWIFT system, because as part of a series of sanctions, “some Western politicians threatened to disconnect Russian banks from the Internet.”
The SWIFT system is used among 11,000 financial institutions in more than 200 countries/regions to arrange cross-border payments. Still, the main disadvantage of processing transactions through such a network is its slowness and expensive cost.
The Central Bank of Russia is planning to establish its own CBDC digital ruble because they plan to initiate a series of tests similar to those conducted in China.
Five Russian banks have expressed interest in participating in the CBDC pilot: Credit Bank of Moscow, Promsvyazbank, Zenit Bank, Dom.RF and the State Commercial Bank of Russia. State Duma, the Federal Assembly of the Russian Lower House, predicts that the digital ruble experiment will begin in the first half of 2021.
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