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Putin intends to build an international payment system that is 'independent of external interference

Putin also talked about the importance of developing a cloud infrastructure

Shashank Bhardwaj
Published: Nov 28, 2022 01:21:29 PM IST
Updated: Nov 28, 2022 02:13:45 PM IST

Putin intends  to build an international payment system that is 'independent of external interferencePhoto by Yevgeny BIYATOV / Sputnik / AFP

On Thursday, Russian President Vladimir Putin proposed establishing an international payment system that is 'independent of external interference.' Vladimir Putin discussed the benefits of using a global payment system based on blockchain technology in a recent speech on November 24 at the International AI Journey Conference in Moscow.

The event was hosted by Sberbank. It is Russia's largest bank and a major lender to the government. During the event, he stated,

"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."

Global financial institutions, he believes, should reflect the realities of the multipolar world and be founded on open democratic principles. During his speech, he emphasised that financial flows and payments between nations are currently under threat due to Russia-West tensions. Vladimir Putin was referring to the sanctions imposed on Russia for its invasion of neighbouring Ukraine. These sanctions have severely limited the Russian Federation's access to global finance and markets. He said,

"In the conditions of the current illegitimate restrictions, settlements are one of the attack lines…The current international payment system is expensive, and its correspondent account system and regulation are controlled by a small group of states and financial companies." 

Putin did not expand on his concept of a blockchain payment system. However, according to him, there is an immediate need to innovate in the field of artificial intelligence. He also talked about the importance of developing a cloud infrastructure capable of meeting the needs of the entire country. Notably, just the day before, local media reported that lawmakers were in talks about amending existing crypto legislation to create a legal framework for a national exchange.

Putin stated that if advanced technologies and the 'millennial experience of mankind' are combined, his proposed system will be created. He cited the eastern hawala system. This system provided mutual settlements long before the appearance of banks and is still operational. On November 17, a bill legalising crypto mining and the sale of mined crypto assets was introduced in Russia's State Duma, the lower house of parliament.

Shashank is founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist.