According to the Central Bank of Russia, the development of digital currencies could challenge the SWIFT international banking payment system and eventually make it redundant.
Many countries are working on digital money
More than 30 financial regulators are currently working on national digital currencies, according to Deputy Governor of the Central Bank of Russia Olga Skorobogatova. He added that given the pace of digital currencies development, several countries could launch new currency formats in the next 5-7 years.
CBR Vice President Olga Skorobogatova said, “Then we can deal directly with integration issues. In this case, SWIFT may not be necessary as there will be a different type of technological interaction. ” said.
Can it destroy the SWIFT system?
However, the global banking network can become one of the platforms for new national currencies. The SWIFT system facilitates cross-border payments among 11,000 financial institutions in more than 200 countries around the world. But some Western politicians are threatening to disconnect Russian banks from the network as part of wider sanctions.
According to the Russia Today report, Russia’s financial watchdog is currently working on developing digital rubles. The new form of the Russian currency, which is expected to coexist with cash and non-cash ruble, will be tested in Crimea next year.
Earlier this year, the Bank of Russia said the digital ruble could be used for international money transfers, but only after their global peers created the dominant digital currencies. According to the Bank for International Settlements (BIS), as of July of this year, at least 36 central banks have published studies on the Central Bank Digital Currency (CBDC).