Russia’s President Envisions a Global Payments System With Blockchain Technology

Priorities change according to the events, and Russia’s president may be taking notice. In a recent speech at the Artificial Intelligence Journey 2022 international AI and machine learning conference, Vladimir Putin spoke of the advantages of using a global payment system based on blockchain technology.

For President Putin, the primary advantage would be the ability to have a global payments framework uncontrolled by foreign powers. However, he also mentions that using such technology in conjunction with other developments (such as artificial intelligence) could make payments more efficient and affordable.

A Blockchain-Based Swift Substitute?

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

The technology of digital currencies and blockchains can be used to create a new system of international settlements that will be much more convenient, absolutely safe for its users, and, most importantly, will not depend on banks or interference by third countries. I am confident that something like this will certainly be created and will develop because nobody likes the dictate of monopolists, which is harming 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 strongly affected the country’s ability to make international payments, including the operations of Russia’s leading bank, Sberbank, in other countries.

The president further asserted that the current payments system was inefficient and “controlled by a narrow club of states and financial groups.”

Putin did not elaborate further on his idea of a blockchain payments system and instead focused on the need to innovate in the field of artificial intelligence and develop a cloud infrastructure capable of meeting the entire country’s needs.

Russia is Slowly Embracing Crypto

Of course, a payment structure based on blockchain technology is possible. Still, President Putin did not expand 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 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. As of today, President Putin appears to be in the “pro-blockchain anti-crypto” camp. The holding of cryptocurrencies is allowed in the country, but their use in payments and financial applications is strictly forbidden 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. In addition to the president’s calls to study the use of blockchain technology, there are reports that the country is opening up to the idea of approving the launch of a national cryptocurrency exchange.

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