Russia and China are working together to create an interbank messaging system that will link their own separate financial messaging systems, a Russian lawmaker said today as Moscow responds to Western sanctions on its own financial system.
Several Russian banks have been excluded from international interbank banking SWIFT payment systemin connection with the events in Ukraine, which prevents them from transferring money outside Russia.
The interbank messaging system developed by the Central Bank of Russia – System for Transfer of Financial Messages (SPFS) – can ensure the flow of domestic interbank transactions, but is limited in terms of synchronization, size and complexity of transactions that can to carry out.
Their connection to the Chinese payment platform CIPS is another possible version. However, the Chinese platform can only be used to send payments in yuan.
“In order to avoid the risks associated with commercial transactions, we need to establish co-operation between its financial messaging systems. Russia and ChinaSaid Anatoly Aksakov, head of the State Duma’s economic affairs committee (lower house).
“I know such cooperation is ongoing,” he said. “Our central bank is cooperating with the People’s Bank of China and I believe that the current situation will give impetus to the relevant procedures.”
The Russian Finance Ministry has announced that Moscow will use its foreign exchange reserves in yuan, as its foreign exchange reserves in dollars and euros have been frozen.
Meanwhile, some Russian banks are using Chinese UnionPay payment system cards, as Visa and Mastercard cards can no longer be used abroad after sanctions have been imposed.
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