Russian state-owned company builds blockchain-based replacement for SWIFT
Russia’s compensation for the service provided to the financial industry by the Society for Worldwide Interbank Financial Telecommunication (legal SWIFT) may finally have come after months of talks on developments.
Rostec, a state-owned defense conglomerate headquartered in Moscow, has announced that it has developed a blockchain platform that can be used for international settlements. Named CELLS industrial blockchain, it is Russia’s alleged replacement for SWIFT.
In its press release, the company emphasized that the CELLS blockchain was developed by one of its 700 subsidiaries, named Novosibirsk Institute Software Systems (NIPS). The platform is multifunctional and can handle up to 100,000 transactions per second, with the potential for further increase in throughput.
According to Rostec CEO Oleg Yevtushenko, the platform will allow settlement in national currencies and allow Russia to circumvent all international sanctions.
“The system will make it possible to switch to settlement in national currencies, eliminate the risk of sanctions and ensure the independence of the national fiscal policy for clearing participants,” said Yevtushenko.
The company is also looking to expand its blockchain functions beyond international settlements. Other uses highlighted by the publication include user identification, data storage, issuance of digital passports and a web application tool protected against, among other things, hacking and DDoS attacks.
The company already invites potential consumers, including software developers, product / system integrators, large companies, financial institutions and banks, to try out the solution.
International sanctions drive Russia to blockchain technology
Following Russia’s invasion of Ukraine, the international community, mainly in the West, launched a massive sanctions campaign against Russia. The country is banned from most international markets and services, with the economy and financial system under most attacks.
According to a report by the Wall Street Journal, the EU approved the sixth tranche of sanctions against Russia this week. The sanctions include a gradual embargo on Russian oil. The US Treasury Department also expanded the list of special Russian designations this week.
Russia’s search for alternatives to SWIFT, as well as avoiding other international sanctions, has led to exploring blockchain technology and other digital currency solutions. Russia provides digital currency with legal recognition in addition to introducing a CBDC.
Russia’s digital currency legislation will cover trade and block reward extraction. Meanwhile, the CBDC is on track for a pilot phase launch by next year, as announced by Central Bank President Elvira Nabiullina.
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