Russia’s clearing and payment system for banks, developed in 2014 as an alternative to SWIFT after suggestions they may be cut off from it, is to run on the blockchain by 2019 according to local media.
Izvestia, a long-running high-circulation daily broadsheet newspaper in Russia, reported the development on Friday, stating according to a rough translation:
“In 2019, the Central Bank will transfer the Financial Communications Transfer System (SPFS) – the Russian equivalent of SWIFT – to the blockchain system.
A source close to the Bank of Russia told Izvestiya about this. The information was confirmed by two bankers familiar with the situation.”
The aim is to make SPFS more appealing for usage due to increases in security and transparency. Sources from the Central Bank say:
“Data from the distributed registry can not be deleted, and the information is automatically updated for all system members with every change made.”
A blockchenized SPFS could also protect from hacks, which some Russian banks have experienced while using Swift, according to the report.
Some thus suggest that could make it even more reliable than SWIFT due to the increased security in message transmissions and their untamperable quality.
“The use of blocking technology will undoubtedly increase the level of protection of SFFS in relation to hacker attacks,” said Maxim Osadchy, head of the analytical department of BKF Bank.
While the report says it is confirmed that the Central Bank will blockchenize its Swift, it is unclear at this stage just how exactly they will do so.
In particular it is unclear whether they will use their own blockchain system, a private version of ethereum, or, quite unlikely in our view due to lack of scalability at this stage, whether they will use the public ethereum blockchain.
That it would have something to do with ethereum, which would probably mean a private eth based blockchain, would be a pretty good guess in our view.
That’s because a new entity called Ethereum Russia formed by Vitalik Buterin, Ethereum’s inventor, signed a partnership with Russia’s State Development Bank in August last year.
Buterin, moreover, has met Russia’s President, Vladimir Putin, himself. While Putin has fallen “ill” with the blockchain to the point he personally intervened to ask the Central Bank to stand down late last year following suggestions they were to ban crypto-exchanges.
In a wider geopolitical context, and we are now speculating, that green light from Putin may have led to Venezuela’s issuing of Petro token and perhaps to Iran planning, what to us looks like, a Venezuela style token.
“Blockchain is Ours Says Russian Delegate,” is a headline we run just last month. Blockchains, of course, are a technology, like electricity or cars. It can’t really be anyone’s. So what the delegate is communicating is that they have significant interest and will in leading in blockchain tech utilization and implementation.
Blockchenizing the clearing house of their banking system would very much be such significant leadership in that adoption.
That means the rest have to step-up their game. That’s because it was excusable for many of them to have ill-informed pre-concieved notions up to 2017, but since then, there is no longer any excuse for not doing your homework because this technology is global as well as “objective.”
It does not care about opinions, just as much as 1+1=2 cares about what you think of it. Quod Iustum Est (it just is).