Blockchain as an international payment system
Can a blockchain serve as an international payment system? Vladimir Putin is positive. At least one country is already using Bitcoin to process foreign trade, but the Russian president apparently envisions a different system.
Blockchain as an international payment system
So far, international payments have mostly relied on classic financial service providers. Probably the most popular offer of this type is the SWIFTNet from the Belgian company SWIFT. As a centralized system, however, it is susceptible to censorship – Russia knows this too. Russian banks have been excluded from the international network since the spring.
The largest country in the world therefore had to find other solutions for international money transfers. So they started developing a new payment system called Cells . This is based on blockchain technology. However, initial showings in June suggested that this would be a centralized system under the control of the Russian state.
Most recently, President Vladimir Putin spoke at the Artificial Intelligence Journey conference in Moscow, where he again referred to distributed ledger technology. In his speech, Putin calls for the emergence of a completely new system that will be used to process international payments and will be completely neutral.
The technology of digital currencies and blockchains can be used to create a new system for international payments that is much more convenient and completely safe for its users and most importantly does not depend on banks or states.
The President does not mention the Russian SWIFT alternative Cells in his speech. The project is being developed by the prestigious Rostec concern.
Is bitcoin unsuitable for international payments?
Even the largest cryptocurrency on earth is not mentioned by Putin, although Bitcoin is already used by another sanctioned country to process foreign trade. In August, Iran paid for purchases abroad with BTC for the first time .
The Cells principle already makes it clear that Russia is not convinced of the volatility of Bitcoin. Instead, stable tokens that represent fiat currencies are to be used on the state-owned blockchain .
Putin’s comment at least sounds as if the system that suits him has not yet emerged. During his speech in Moscow he says:
I am confident that something like this will certainly emerge and develop, because nobody likes the dictates of the monopolists, which harms everyone involved, including the monopolists themselves.
He goes on to say:
The existing system of international payments is expensive, the correspondent accounts system and regulation are controlled by a small group of states and financial companies.
Ten days ago, a Russian representative made the statement during the international trade fair in Cuba. There he holds out the prospect of settling trade between Russia and Cuba with crypto .
