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What led President Putin to Demand for a Blockchain-based Global Payments System?

According to President Putin, the new system will be free from financial control and outside meddling.

Photo by Jaunt and Joy / Unsplash

According to President Putin, the new system will be free from financial control and outside meddling.

The proposal

Putin Proposed developing a system using blockchain technology and digital cash. The President said this during a symposium on artificial intelligence that Sberbank hosted (1). In his address, Putin stated that the difficult ties between Russia and the Western giants had put international agreements in danger

According to Putin, it is possible to build a new system of international payments based on distributed registries and digital currency technologies, considerably more convenient yet entirely safe for participants and independent of banks and third-party meddling. Putin claims the current system is costly. The President also criticized the price of the present international payment system. Putin claimed that the financial organizations in charge of the global settlement are to fault for their astronomical cost.

What led to this proposal?

Putin stated that international settlements are now a target of assault and referred to the sanctions imposed on Russia by the West as unlawful limitations. Because they encounter these tactics, their financial institutions know this better than anyone, he continued. Russia uses cryptocurrency to circumvent sanctions following its invasion of Ukraine in March, and the Bank for International Settlements barred Russia from utilizing its services. Since then, Russia has taken several pro-crypto actions (2) and tried to circumvent the restrictions that have been put in place. Additionally, the nation is more in favor of allowing international cryptocurrency payments.

The current situation

On November 24, It was revealed that Russia was drafting legislation (3) to create a national cryptocurrency exchange. Legislators in the nation were also drafting a bill to sanction cryptocurrency mining there. Another nation that has used cryptocurrency to try to circumvent western sanctions is Iran. In August, the Asian nation paid a $10 million import order using cryptocurrency.