Russia Prepares For SWIFT Exit With Blockchain

Russia’s corporate treasurers are working with the nation’s central bank on a blockchain initiative, reports in CoinDesk said Friday (June 15).

The Russian Association of Corporate Treasurers is joining the government-led Masterchain blockchain initiative, a platform developed by the central bank to facilitate communication within Russia’s banking market. Russia is reportedly looking to use the platform to replace SWIFT’s inter-bank communications network.

Russia’s FinTech Association and 14 of the nation’s largest banks collaborated on the development of Masterchain, reports noted, citing a white paper. The initiative eventually hopes to join banks and government agencies that collaborate on contract registration and regulation.

Using Masterchain will reduce operating costs by up to five times, the white paper claims, and will accelerate contract processing.

Reports noted that the initiative is also looking to develop a Know Your Customer (KYC) mechanism based on digital identities, enabling financial institutions to share underwriting information like credit histories, as well as information about fraud cases, via a secure platform.

European Union sanctions against Russia for its annexation of Crimea in 2014 sparked concerns that SWIFT may remove Russia from its system. Reports said that has forced the country to experiment with alternatives to facilitate payments and inter-bank messaging and communication.

Earlier this year reports in The New York Times said Russia has taken aggressive steps to become a global leader in blockchain technology. The nation participated in an international delegation last year to discuss standards for blockchain and cryptocurrencies; its delegation head Grigory Marshalko expressed a desire for Russia to lead the world on the technology.

“Look, the internet belongs to the Americans — but blockchain will belong to us,” he said according to reports, citing an unnamed delegate present at the time.

Last year reports emerged that Russian president Vladimir Putin had considered investing in Ethereum.