Russian President Envisions Global Payment System Using Blockchain Technology

Priorities change based on events, and the Russian president may take notice. In a presentation at the recent AI Journey 2022 International Conference on Artificial Intelligence and Machine Learning, Vladimir Putin spoke about the advantages of using a global payment system based on blockchain technology.

For President Putin, the main advantage is the ability to have a global payments framework that is not controlled by foreign powers. However, he also mentioned that using this technology in conjunction with other developments such as artificial intelligence could make payments more efficient and affordable.

Blockchain-based Swift alternative?

President Vladimir Putin explained that the right use of blockchain technology could be of great benefit to users and governments. He said that the decentralized, non-monopoly technology will eventually be deployed globally because of the advantages it offers:

Digital currency and blockchain technology can be used to create a new international settlement system that will be more convenient, absolutely safe for users and, most importantly, not dependent on the intervention of banks or third-party countries. I believe something like this is bound to be created and developed because no one likes a monopoly ordering it to the detriment of all parties, including the monopoly itself.

After the Russia-Ukraine conflict, the United States and some international communities imposed a series of financial sanctions on Russia. The sanctions have severely affected the country’s ability to make international payments, including the operations of major Russian lender Sberbank in other countries.

The president further asserted that the current payment system is inefficient and “controlled by a small number of countries and financial groups.”

Putin did not elaborate further on his ideas for a blockchain payment system, instead emphasizing the need for innovation in the field of artificial intelligence and the development of a cloud infrastructure capable of meeting the needs of the entire country.

Russia is slowly embracing cryptocurrencies

Of course, payment structures based on blockchain technology are also possible. Nonetheless, President Putin did not elaborate on the proposal, leaving aside the question of who would control the validators for such a system. In the case of permissioned blockchain networks, if governments themselves control nodes, the ability to censor transactions is as imminent as it is in current payment systems.

Russia has a love-hate relationship with cryptocurrencies and blockchain technology. As of today, President Putin appears to be in the “pro-blockchain-anti-cryptocurrency” camp. The country allows the holding of cryptocurrencies but strictly prohibits their use in payments and financial applications, as they are considered ruble-mimicking activities that violate the country’s sovereignty.

However, the country’s political stance has recently become more flexible. In addition to the president’s call to study the use of blockchain technology, there are reports that the country is open to approving the idea of ​​launching a national cryptocurrency exchange.

In addition, a few days ago, the Duma started discussing the legalization of cryptocurrency mining and the sale of tokens mined – something that Putin also mentioned at the time.

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