- SWIFT international transfers may soon disappear.
- Central Bank of Russia introduces SPFS.
- Russia is working on the digital ruble.
- Many countries are adopting digital currencies.
Central Bank of Russia (CBR) states, the rapid adoption of digital currency may prove challenging to SWIFT. The current global banking system may soon become redundant.
As stated by First Deputy Governor, Olga Skorobogatova, over 30 financial regulators are working on their own digital coins. At this rate, many nations will adopt this new form of payment over the next decade.
This new system provides faster trades at a smaller fee. Adopting this new system would make SWIFT global trades obsolete. Skorobogatova added that SWIFT could still be a key platform for trading digital coins.
So far, SWIFT carries cross-border payments to over 11,000 financial intuitions. It stretches across the entire globe, linking over 200 countries.
Some western countries have not embraced this new system. Instead, they warned to cut off Russian banks from the main network. To counter this, the CBR built SPFS — a domestic financial messaging network.
Russia is currently making the digital ruble. It is set to launch in Crimea next year. The plan is to use digital rubles for global transfers. It will take off once other nations have also launched their digital currencies.
Besides Russia, other countries have begun their digital currency journeys. While establishing a Central Bank Digital Currency (CBDC) may take a while, some countries have taken the lead.
China’s digital yuan was one of the first to run tests. The EU has begun prepping the digital euro. And Sweden already launched its pilot CBDC earlier this year.