In light of the sanctions and limitations imposed on his nation, Russian President Vladimir Putin stated that a new and independent international dispute resolution mechanism is required.
According to President Putin, the new system would be free from intervention from banks and other parties. He proposed developing a system using blockchain technology and digital currency.
The President made this assertion in a speech at a conference on artificial intelligence hosted by Sberbank. Given the broken state of relations between Russia and Western nations following its “special operation” in Ukraine, Putin revealed in his speech that international financial settlements are in danger.
“…possible to create a new system of international payments based on digital currency technologies and distributed registries, much more convenient, but at the same time completely safe for participants and independent of banks and third-party interference.”
The President also condemned the commission rate of the existing global payment system. Putin claimed that the financial organizations in charge of international settlements are to blame for their astronomical price.
“Today, the system of international payments is expensive, with correspondent accounts and regulation controlled by a small club of states and financial groups.”
Putin remarked that international financial settlements have now become a weapon and referred to the sanctions imposed on Russia by the West as unlawful limitations. He added that because Russian financial institutions have been exposed to these activities for a long time, they are the ones who understand this scenario the best.
After the invading Ukraine in March, the Bank for International Settlements soon barred Russia from using its services. Russia has also been banned from the SWIFT network, a worldwide messaging system for financial institutions used by almost all major banks.
The Bank of Russia has accelerated the development of the digital ruble as a result of the war and the subsequent international sanctions. The digital ruble pilot project with actual transactions and clients was initially scheduled by the Russian central bank for 2024, however, it has been unanimously decided to launch the initiative in April 2023.
The Russian central bank has revised its framework for policing cryptocurrencies and reached an agreement with the finance ministry to approve cryptocurrencies for international transfers. Cross-border crypto transactions are inevitable given the geopolitical situation, according to the country’s central bank.
Todayq News reports that Russia is also drafting legislation to set up a national cryptocurrency exchange. Russian lawmakers are also drafting a bill that would legalize crypto mining in the country. The Ministry of Finance and the Central Bank of Russia are actively involved in framing these laws. It’s interesting to note that there has previously been disagreement between these two institutions over crypto regulation.