Russia seeks to create SWIFT alternative with Wildberries' help

The richest woman in Russia is set to utilize the local equivalent of Amazon to create an international payment system. According to Bloomberg, Vladimir Putin himself gave the green light for the initiative. After the invasion of Ukraine, Russia was cut off from the SWIFT system.

Bloomberg reminds us that Tatiana Bakalchuk earned billions selling everything from brooms to wedding dresses on her online marketplace. We read that the richest woman in Russia is making an unexpected turn: she is helping insulate the economy from sanctions by building an alternative to the global payment system, from which the leading Russian banks have been excluded.

Bakalchuk founded Wildberries, which is supposed to be Russia's answer to Amazon's business model. Now, she is beginning a collaboration with Russ Group, the largest domestic external advertiser. This is intended to help build her digital market, where small and medium-sized enterprises could promote and export their products.

According to two Kremlin proximate sources of Bloomberg, who refused to disclose their identities, Wildberries and Russ Group also plan to create a payment platform that could substitute for the cross-border SWIFT network, from which Russia is cut off.

It is reported that President Vladimir Putin personally approved these efforts and appointed Maksim Oreshkin, deputy head of the Kremlin administration, to oversee them. One source emphasizes that the payment system is not guaranteed to succeed.

Kremlin spokesman Dmitry Peskov stated in a text message that the Russian President ordered officials to consider the Wildberries and Russ Group digital platform project, but no details are yet available.

Wildberries also declined to comment on their plan regarding the payment system.

SWIFT is the leading communication network for initiating international payments. It was created in the 1970s and has connected about 11,000 institutions in over 200 countries.

The US and the European Union imposed sanctions on Russia's critical lenders after the invasion of Ukraine, cutting them off from SWIFT and forcing Russia to use other payment options for imports and exports. Tatiana Bakalchuk herself was placed on the Polish sanctions list in 2022.

Bloomberg reminds us that Bakalchuk, not seen as close to the Russian President, spoke at his flagship economic forum in St. Petersburg in June. At the time, she said that she believes private business in Russia has a future and is developing, although support from the state is needed for this purpose.

"Bakalchuk understands very well that the crisis is the time of opportunities," assessed Alexandra Prokopenko, a worker at the Carnegie Russia Eurasia Center, in an interview with Bloomberg. "She's seeking to expand the business to protect it, to become too big to fail and more visible to the Kremlin," she added.

The Bloomberg Billionaires Index estimates that Bakalchuk's personal fortune increased by about 40% to $8.1 billion in the aftermath of the invasion of Ukraine, as fiscal incentives boosted consumer spending. Meanwhile, the value of products sold on Wildberries increased by 50% last year to ₽2.5 trillion (approximately $45 billion CAD), with a growing share of domestic goods.