Russia is a country that believes in the potential and power of digital assets. The country’s central bank revealed that digital currencies could compete with SWIFT in terms of cross-border payments and might one day overtake it. Russia admitted that digital currencies’ technology beats many payment options in terms of speed and efficiency.
Not too long ago, the European country hinted at plans to launch the digital rubble to show a clear picture that the nation is working towards ensuring global digital adoption and might prefer it to other options like SWIFT.
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International banking is a part of traditional banking, with countless intermediaries. In international banking, transactions are generally slower and take so much time. Despite being time-wasting and inefficient, the exorbitant transaction fee is a letdown. Traditional banking has a centralized system that the State regulates and controls.
Though the increased popularity of digital assets and their use for some illegal purposes, nations are looking to hold the platform and even include some know-your-customer requirements for wallets to follow.
The European Union is also looking to explore the booming crypto industry to create its Central Bank Digital Currencies. Russia revealed its plan some time ago to develop its digital rubble but explained that it wasn’t in a rush to make the currency.
The nation opined that several countries would create their digital currencies in time to come. Russia admits that it will postpone its integration involving other countries for now. It also explained that the global adoption of cryptocurrency could change the usual traditional means of transacting, and the global market has to have a supporting transaction network. Russia is a tech-inclined country that leads impressively involving it. Its acceptance of the platform might influence other countries to take their stance.
Why SWIFT is not efficient
SWIFT is not foreign to the global market, being the primary source of cross-border transactions of different financial institutions with hundreds of international banks using the platform. The platform, however, needs a structural change due to its time and price inefficiency. It’s time-wasting and too expensive.
The transaction fees involved in its transaction are usually let down to people who want to do international businesses or even send money abroad to their loved ones. With Russia’s criticism of SWIFT, it is obvious there might be some problems with the country and other international bodies that have adopted the use of cryptocurrency.
Countries hinted at Russia’s possible sanction by cutting the world’s largest country from using the network for its international transactions. Being an innovative nation, Russia might develop its network to efficiently send money abroad without spending so much time on transaction fees.
During a meeting involving stakeholders in Russia’s financial institution, the country reported that once digital rubbles eventually came in place, it would not replace cash. It explained that money and the rubbles would be used side by side. In a few years, Russia could launch its new digital ruble for use.