Russia Launches SWIFT Blockchain-Based Alternative to Circumvent Sanctions
Russia’s Rostec Corporation subsidiary, RT-Techpriemka has announced that it has successfully launched a distributed ledger technology (DLT) powered payments solution dubbed CELLS. The team claims CELLS will serve as an alternative to SWIFT, enabling the country to effectively circumvent international sanctions.
Russia’s SWIFT Blockchain-Based Alternative
Russian state-owned corporation, Rostec, has launched CELLS, a blockchain-powered platform it claims comes with several use cases, including facilitating super fast and secure international payments without having to go through the Society for Worldwide Interbank Financial Telecommunications (SWIFT).
Rostec subsidiary, RT-Techpriemka presented the CELLS blockchain solution to attendees during the recently concluded Digital Industry of Industrial Russia (CIPR-2022) conference in Nizhny, Novgorod.
Per sources close to the matter, the CELLS blockchain platform was developed by the Novosibirsk Institute of Software Systems (NIPS), and it gives users access to an ecosystem of software products and services.
Specifically, the team has hinted that CELLS is built to facilitate payments in national fiat currencies, making it a real alternative to SWIFT, for cross-border payments. Additionally, CELLS can be used for digital currency storage, know-your-customer (KYC) procedures, and more.
Commenting on the launch of CELLS, Oleg Yevtushenko, Rostec’s executive director said:
“The digital payment system on the blockchain platform can be used as a full-fledged replacement for SWIFT, providing high-speed, security, and irrevocability of transactions. The system will allow switching to settlements in national currencies, eliminate the risk of sanctions and ensure the independence of national financial policy for clearing participants.”
A Barrage of Sanctions
Last February, the age-long Russo-Ukrainian War that has been on since 2014, took a new turn when the Kremlin invaded Ukraine, triggering Europe’s fastest-growing refugee crisis since World War II.
Despite calls from the international community for Russia to end the invasion, the president Putin administration has continued the onslaught, forcing world powers such as the United States, the United Nations, and others to impose a barrage of sanctions on the Kremlin.
In March 2022, the European Union announced the expulsion of seven major Russian financial institutions from SWIFT, including VTB Bank, Bank Otkritie, Novikombank, Promsvyazbank, Rossiya Bank, Sovcombank, and VEB, excluding only Sberbank and Gazprombank, which handles most of its gas and oil exports.
In the same vein, a good number of crypto exchanges also limited their services to Russian users, with Binance making it clear that its Visa and Mastercard products will no longer function in the region.
In a bid to bypass the sanctions, the Russian Congressional energy committee chairman, Pavel Navalny, hinted during a press conference last March that the country could turn to bitcoin (BTC) and other cryptocurrencies as payment methods for the exports of its natural resources.
As reported by crypto. news in April 2022, Russia’s Federal Tax Service (FTS) floated a proposal that aims to enable companies in the region to use digital currencies for some of their operations, including paying for goods and services and receiving payments from foreign entities.
With CELLS now launched, it remains to be seen whether Russia’s new blockchain-based payments solution will finally enable it to overcome the crippling economic sanctions imposed on it.
