Russia commits to developing domestic payment system to counteract sanctions
Despite sanctions disrupting trade with partners like Turkey and China, Russia seeks a robust alternative to foreign systems, though specifics about its difference from the BRICS Pay network remain unclear.
Russia is taking significant steps to establish a domestic payment system that will allow for trade and international transactions independent of Western financial institutions. Prime Minister Mikhail Mishustin announced this initiative at the Moscow Financial Forum, emphasising the need for a principles-based approach to international trade. He highlighted that the government, the Bank of Russia, and the financial community will collaborate to create a new settlement infrastructure.
Mishustin explained that this system aims to enhance the transaction experience for Russian businesses and their international partners by ensuring equality among countries, maintaining payment confidentiality, and enabling instant transactions at minimal costs. Notably, he revealed that a substantial portion of settlements between Russia and China are already conducted in national currencies, accounting for around 70% of their transactions.
However, existing sanctions have disrupted trade flows between Russia and its key partners, such as Turkey and China, potentially affecting the nearly $300 billion in annual trade with these nations. While Mishustin did not specify whether the new system would differ from the BRICS Pay network recently tested by the bloc, he reiterated the importance of creating a robust alternative to foreign systems.
