Russia’s replacement for the service rendered to the financial industry by the Society for Worldwide Interbank Financial Telecommunication (legally SWIFT) may have finally arrived after months of talks about its development.
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 the CELLS industrial blockchain, it is Russia’s purported replacement for SWIFT.
In its press release, the company highlighted 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 thousand transactions per second, with the potential for further increases in throughput.
According to Rostec Executive Director Oleg Yevtushenko, the platform will allow for settlements in national currencies and allow Russia to circumvent all international sanctions.
“The system will make it possible to switch to settlements in national currencies, eliminate the risk of sanctions and ensure the independence of the national financial policy for clearing participants,” Yevtushenko said.
The company is also looking to expand its blockchain functions beyond international settlements. Other use cases the release highlights include user identification, data storage, digital passport issuance, and a web application tool protected from hacking and DDoS attacks, among others.
The company is already inviting potential consumers, including software developers, product/system integrators, large companies, financial institutions, and banks, to try out the solution.
International sanctions driving Russia to blockchain technology
Following Russia’s invasion of Ukraine, the international community, mainly the west, launched a massive sanctions campaign against Russia. The country is locked out of most international markets and services, with its economy and financial system under the most attack.
According to a Wall Street Journal report, the European Union approved the sixth tranche of sanctions against Russia this week. The sanctions include a phased embargo on Russian oil. The U.S. Treasury Department also expanded its list of special Russian designates this week.
Russia’s search for alternatives to SWIFT, as well as to evade other international sanctions, has led it to explore blockchain technology and other digital currency solutions. Russia is giving digital currencies legal recognition as well as introducing a CBDC.
Russia’s digital currency legislation will encompass trading and block reward mining. Meanwhile, its CBDC is on track for a pilot phase launch by next year, as announced by Central Bank of Russia President Elvira Nabiullina.