• The Bank of Russia’s First Deputy Governor, Olga Skorobogatova, believes that the integration of Central Bank Digital Currencies (CBDCs) has the potential to replace SWIFT.
• Russia is planning on launching a digital Ruble and it will adopt a hybrid formula integrating centralized and blockchain solutions.
• Despite the growing CBDC sentiment, experts believe Bitcoin might be better for cross-border transactions.
Central Bank Digital Currencies Pose Threat to SWIFT
The First Deputy Governor of the Bank of Russia, Olga Skorobogatova, believes that the integration of Central Bank Digital Currencies (CBDCs) has the potential to replace SWIFT, a popular financial network messaging system. This would mean payments and other information on these CBDCs would be carried out on another settlement infrastructure entirely different from what is currently used. Interested countries only need an agreement in order to operate this new system.
Russia’s Push for Its Digital Ruble
Russia has been searching for alternative payment options since its invasion of Ukraine in order to evade Western sanctions. At one point, they considered accepting payments in Bitcoin (BTC) for selling oil and gas to China and Turkey but have since decided against this option. Now they are pushing forward with developing their national digital currency – a digital Ruble – which will possess cross-border features in order to facilitate international trade. It will utilize a hybrid formula integrating both centralized and blockchain solutions.
Testing Phase For The Digital Ruble
The pilot phase for the development of the digital Ruble will follow suit with China’s approach; however, unlike some other nations who promoted their CBDC usage by using them for government payments, Skorobogatova claims that Russia will not pay employees salaries with it in order to stimulate its usage. Instead they plan on testing it like Mir card payment system before making it available for widespread use.
Will Bitcoin Overpower CBDCs?
Despite the growing sentiment towards CBDCs, some experts believe Bitcoin might be more suitable for cross-border transactions due its decentralized nature and lack of censorship or control from any government or institution. This could offer users more freedom when performing international business as well as provide added security and privacy benefits compared to traditional banking systems which are prone to manipulation or surveillance from third parties or authorities..
CBDCs present an interesting opportunity for governments looking to bypass existing payment infrastructures like SWIFT while also providing citizens with access to faster international payments at lower costs than those offered by current banking networks. However there is still debate over whether CBDCs can truly overtake Bitcoin as a preferred choice when it comes down to global transfers due mainly because of its decentralized nature enabling users greater privacy rights plus freedom from control from any third party authority or government institution..