Russian President Considers Global Payment System With Blockchain Technology

Priorities change depending on events, and the Russian president may be taking notice. In a recent speech at the International Conference on AI and Machine Learning Artificial Intelligence Journey 2022, Vladimir Putin discussed the benefits of using a global payment system based on blockchain technology.

For President Putin, the main advantage would be the possibility of having a global payment framework not controlled by foreign powers. However, he also mentions that using this technology in conjunction with other developments (like artificial intelligence) could make payments more efficient and affordable.

A blockchain-based Swift substitute?

President Vladimir Putin explained that proper use of blockchain technology could be very beneficial for users and governments. He said that a decentralized, non-monopoly technology will eventually be deployed globally because of the advantages it offers:

The technology of digital currencies and blockchains can be used to create a new system of international settlements which will be much more convenient, absolutely safe for its users and, above all, will not depend on banks or interference from third countries. I am convinced that something like this will certainly be created and will grow because no one likes the diktat of the monopolists, which harms all parties, including the monopolists themselves.

After the conflict between Russia and Ukraine, the United States and part of the international community imposed a series of financial sanctions against Russia. These sanctions have severely affected the country’s ability to make international payments, including the operations of Russia’s main bank, Sberbank, in other countries.

The president further claimed that the current payment system was inefficient and “controlled by a select club of states and financial groups”.

Putin did not develop his idea of ​​a blockchain payment system any further and instead focused on the need to innovate in the field of artificial intelligence and develop a cloud infrastructure capable of meeting the needs of the whole country.

Russia Slowly Embracing Crypto

Of course, a payment structure based on blockchain technology is possible. Yet President Putin did not elaborate on the proposal, leaving aside the question of who would control the validating nodes of such a system. In the case of a permissioned blockchain network, if the governments themselves control the nodes, the ability to censor transactions is as imminent as it would be in the current payment system.

Russia has had a love-hate relationship with cryptocurrencies and blockchain technology. To date, President Putin seems to belong to the “pro-blockchain anti-crypto” camp. Holding cryptocurrencies is allowed in the country, but their use in payments and financial applications is strictly prohibited as they are considered activities that would mimic the nature of the ruble, undermining the sovereignty of the country.

However, the country’s political stance has recently softened. Along with calls from the president to study the use of blockchain technology, reports indicate that the country is opening up to the idea of ​​approving the launch of a national cryptocurrency exchange.

Moreover, a few days ago the Duma started discussions to legalize the mining of cryptocurrency and the sale of mined tokens – which Putin also mentioned at the time.