Russia and China will sign agreements to convert the payment method to national currencies to de-dollarize the economy. Moscow ended the use of American Visa and MasterCard after corporations withdrew from the invasion of Ukraine. Russia instead decided to switch to the Chinese card system, and its largest state bank, Sberbank, issued Mir cards with China’s UnionPay.
The two sides agreed to deepen financial, trade and economic cooperation, especially in the national payment card system. They confirmed the conclusion of a deal within the framework of Russian and Chinese legislation to assist commercial banks in making their independent decisions on joining the payment system in the other party’s state. Tass pointed out that allies Russia and China will develop bilateral payments in national currencies, encouraging and expanding the use of national currencies, particularly through promoting their use when signing international trade contracts.
Stabilizing Financial Payment Methods
The Russian government will sign relevant agreements with the Chinese government to make the alternative financial method permanent, which was adopted after the US and its ally European Union banned the international payment system SWIFT. This announcement was made on the official legal information portal of Moscow. The draft decree, approved via that government document accessed by state-affiliated TAS, reads: “Settlement and payment for goods, services and direct investments between economic entities of the Russian Federation and the People’s Republic of China shall be carried out in accordance with international practice.” and the law of the States of the Parties dealing with the use of foreign currency, Russian currency (rubles) and Chinese currency (yuan).” It further signifies that economic entities have freely agreed upon the choice of payment currency and mode of payment.
Iran had similarly announced plans to de-dollarize its economy and address the fallout of sanctions imposed by the United States. The Kremlin’s press secretary and spokesman for the President of the Russian Federation, Dmitry, announced that both Tehran and Moscow would gradually move away from the use of the dollar in bilateral relations. Peskov told reporters from state-affiliated agencies that Iran would “move away from the practice of using the dollar” and switch to the SPFS, Moscow’s domestic ‘system for the transfer of financial messages’, designed by the Central Bank of India. SWIFT is equivalent to the financial transfer system made. Russia will conduct transactions in its own currency.