Cross-Border Exchange: A Russian Student’s Project Could Reshape the Global Financial System

Transfers Without Intermediaries

Ilya Prokofiev, a master’s student at the Moscow Institute of Physics and Technology (MIPT), has developed a model for cross-border payments based on central bank digital currencies (CBDCs) and automated market makers (AMMs). The system could cut fees from 7% to 1% and reduce transfer times from several days to near-instant.

Today’s conventional cross-border transfers pass through multiple intermediaries—correspondent banks, clearinghouses, and SWIFT—resulting in lost time and vulnerability to political pressure. By replacing these links with decentralized algorithmic exchange, Prokofiev’s model offers a strategically significant alternative.

A New Payment Paradigm

Many countries are either piloting or developing their own CBDCs. By combining CBDCs with AMMs, the Russian student created a tool suitable for integration into official financial systems, compliant with AML/KYC requirements.

AMMs function as digital exchange desks, automatically setting exchange rates based on formulas and reserve balances. This ensures near-instant transactions and reduces the possibility of sanctions-related interference to almost zero.

Today’s system is built around correspondent banks, the SWIFT global network, and regional systems like T2 and CHIPS. For example, if a Russian company pays an Indian one, its bank sends the payment through a chain of correspondent banks with mutual accounts and access to settlement systems. The transfer often involves two or three intermediaries. This is slow and costly—average costs for developing countries are around 7%, and up to 3% for developed economies. There is also a transparency problem: you don’t know at which stage your payment is at any given time. My goal was to propose and test a system that solves all these issues

Ilya Prokofiev

master’s student at the MIPT Blockchain Department

The viability of AMM models for liquidity provision and automated pricing has already been proven in decentralized cryptocurrency exchanges.

Decentralization on the Rise

Prokofiev’s model brings together several decentralization trends, offering a hybrid, regulated solution that can operate within national frameworks and across international borders.

It is particularly relevant for developing countries seeking technological sovereignty and looking to reduce dependence on Western financial systems.

Globally, CBDC initiatives are multiplying, aiming to make payments more efficient, cut costs, and enhance monetary control.

China is actively testing the e-CNY, while Brazil and Nigeria are launching their own digital currencies. Russia has passed a law on the digital ruble and is rolling it out step by step for budgetary settlements. Meanwhile, Russia’s Faster Payments System (FPS) is expanding abroad, with Armenia, Kazakhstan, and other CIS countries already benefiting from instant, free transfers.

From Pilot to Implementation

A logical next step would be a pilot launch supported by the Bank of Russia. Given the regulator’s interest in the digital ruble and alternative payment infrastructures, the model could be tested within the Eurasian Economic Union or through bilateral agreements with partner nations. Such pilots would help assess resilience to volatility, transaction load, and cyber risks.

The model’s export potential is significant. Integration into international settlement networks could create a genuine alternative to SWIFT. Countries in Africa, Southeast Asia, and Latin America—where remittance fees often reach 10%—could find the technology appealing as a way to lower costs and strengthen financial sovereignty.

If scaled successfully, Prokofiev’s project could become one of the cornerstones of a new global financial system.