SPFS was designed by the Russian central bank in response to SWIFT’s threats withdraw from Russia.
Russian authorities are planning to transfer the country’s money transfer system to blockchain technology in 2019 according to a report in Izvestiya.
Sources close to the Russian central bank told the media outlet that the Financial Communications Transfer System (SPFS) would be converted to a blockchain system. SPFS is the Russia equivalent of SWIFT. It was developed and implemented in 2014 following Western threats to withdraw SWIFT from Russia as part of sanctions for the invasion of Crimea. Russia developed its own version of Visa, called Mir, for the same reason.
This threat wasn’t carried out in the end but is still under discussion. SPFS exists as an alternative system, and 582 Russian banks use the system as standard. The remainder keeps it in reserve should SWIFT be withdrawn.
According to the article, the transaction costs of the Russian system are lower than those of SWIFT. In February of this year, the central bank announced that the system had been extended to cover all countries of the European Economic Area – Marina Frolova, Deputy Director of Rosbank, told Izvestiya that SPFS must expand its user base in order to be considered a valuable alternative to SWIFT.
Tamara Kasyanova, managing director of a local audit company, said that transferring to blockchain technology will attract more people to use the new system.
Maxim Osadchy, head of the analytical department of a local bank, said: “The use of blockchain technology will undoubtedly increase the level of protection in relation to hacker attacks.”
We can see the tides turning for the adoption of Blockchain technology in establishment organizations. The central bank of Russia is getting ready to transfer payments on SPFS, which is its domestic version of SWIFT, to the blockchain in 2019.
System for transfer of financial messages (SPFS) is a “Russian analog to SWIFT” that has been developed by the Bank of Russia since 2014. That software package is designed to create and process documents in UFEBS (Unified Formats of Electronic Banking Messages) and MT formats. It was developed and implemented Western threats to withdraw SWIFT from Russia as part of sanctions for the invasion of Crimea. Russia developed its own version of Visa, called Mir, for the same reason.
A source close to the Central Bank of Russia reported that authorities are currently deciding on a blockchain solution on which to begin sending payments. This is a domestic effort to make use of the existing options available, which is most likely going to be Ethereum.
SPFS has a history of hacks and attacks that has escalated security concerns over the years. By integrating Ethereum to SPFS the system could become more reliable than the traditional technology supported by SWIFT. “Implementing blockchain technology undoubtedly raises the level of protection for SPFS in relation to hacker attacks,” a senior official at fellow bank BKF commented.
It is to be noted that there are no confirmed reports on this issue and the Central Bank of Russia is still to make an official statement regarding this. A world superpower transferring it entire national payment system to blockchain is a remarkable step in mainstream adaptability.