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Digital Currencies Could Challenge SWIFT System, Even Replace It
According to Olga Skorobogatova, the emergence of digital coins makes international banking payment systems a subject of debate in such a way that such conventional logic could become obsolete.
She backed her comments on the fact that more than 30 financial regulators “are currently working on their national digital currencies.” She also believes that many countries could introduce their crypto over the next 5-7 years. Skorobogatova has said:
Then, we can deal with direct integration issues. In this case, SWIFT may not be necessary because it will be a different kind of technological interaction. However, the global banking network may become one of the platforms for the new form of national currencies.
However, in order to achieve maximum integration of digital currencies, CBR Deputy Governor believes that protection should be completely guaranteed in the cryptocurrency technology before thinking about launching a new global transaction network.
An Alternative Crypto-Based Global Payments Network to Bypass Sanctions?
RT’s study also adds to Skorobogatova’s words that Russia is working to respond to ongoing threats to the country’s exit from the SWIFT scheme, as “some Western politicians have threatened to disconnect Russian banks from the network” as part of a series of sanctions.
The SWIFT system is used in more than 200 countries by 11,000 financial institutions to arrange cross-border payments. However, the key downside of the handling of transactions across such networks is the slowness and the costly costs it involves.
The Central Bank of Russia is working on its own CBDC, a digital rouble, as it aims to conduct a series of tests close to those carried out by China.
Five Russian banks have already expressed interest in participating in the CBDC pilot: Moscow Credit Bank, Promsvyazbank, Zenit Bank, Dom.RF and Russian National Commercial Bank. The State Duma, the Russian Federal Assembly’s lower house, expects the digital rouble experiment to begin in the first half of 2021.