In a recent speech at the international AI and machine learning conference Artificial Intelligence Journey 2022, Vladimir Putin spoke about the advantages of using a global payment system based on blockchain technology. And according to the leader of Russia, his country can take measures towards establishing such a system. In Putin’s view, the main advantage would be the ability to have a global payment structure not controlled by foreign powers. In this way, such a system would serve as an alternative to Swift, controlled by the US and Western powers. However, he also mentions other advantages of this technology. For example, Putin has claimed that blockchain can make cross-border payments more efficient and accessible. This would happen by uniting cryptocurrency technology with others, such as artificial intelligence.
Fighting “monopolists”
President Vladimir Putin explained that the proper use of blockchain technology can be highly beneficial for both users and governments. Putin cited the decentralized and non-monopolistic characteristics as great advantages. “The technology of digital currencies and blockchain would serve to create a new international payment system that will be much more convenient, absolutely safe for its users. Most importantly, this system will not depend on banks or third-party interference. I am confident that something like this will certainly be created and will develop in the future, ”he said. In addition, Putin also took the opportunity to sting traditional systems, calling them “monopolistic”. It should be remembered that Russia has suffered sanctions imposed by the US and the European Union, which include the loss of part of access to Swift. As a result, the country has been unable to carry out much of its international payments. And Putin was adamant. “Nobody likes the dictate of the monopolists, which is hurting all parties, including the monopolists themselves,” he said.
A Swift on Blockchain
Sanctions imposed by the US and the European Union have heavily affected the country’s ability to make international payments. For example, Sbaerbank, Russia’s main bank, was unable to make several international payments. Another problem is that countries have blocked part of Russia’s international reserves, preventing the country from accessing its money. These reserves are denominated in dollars, so the US has an exaggerated amount of control over them. Putin claimed that the current Swift payment system was inefficient and “controlled by a select club of states and financial groups”. In contrast, a blockchain system has numerous advantages and, in Putin’s view, does not have the control of any government. The Russian leader did not elaborate on his idea for such a system. Instead, he focused on the need to innovate in the field of artificial intelligence and develop an infrastructure capable of meeting the needs of the entire country.
Russia Moves Closer to Cryptocurrencies
Obviously, a payment structure based on blockchain technology is possible. Still, Putin’s proposal is not about a fully decentralized network like Bitcoin (BTC). For example, in the case of an authorized blockchain, governments themselves can control the nodes. Therefore, the network can still censor transactions according to the government’s will. The Swift system problem would persist, but now serving the wishes of the Russian government. Russia has had a love-hate relationship with cryptocurrencies and blockchain technology. As of today, President Putin appears to be in the “pro-blockchain and anti-cryptocurrency” camp. The government allows the possession of cryptocurrencies, but their use in payments and financial applications is strictly prohibited as they are considered activities that would imitate the nature of the Ruble, infringing on the country’s sovereignty. However, the country’s political stance has become more flexible recently. Recently, the country’s assembly (Duma) started discussions to legalize cryptocurrency mining and token selling.
