Russia’s SWIFT alternative spreads at record pace – central bank
Russia’s SPFS interbank messaging system has expanded at record pace this year, Alla Bakina, the head of the central bank’s national payment system department, said on Friday.
“The SPFS financial messaging system showed serious expansion this year, as we have more foreign participants connecting. Since the beginning of the year, more parties have joined the SPFS than in all previous years of the system’s existence,” Bakina said at a banking forum in Kazan.
According to the official, 50 new entities from abroad joined the SPFS in the first six months of 2022, bringing the total number to 440. Over 100 of them are foreign entities from 12 countries, although the regulator does not disclose the list of countries whose institutions have joined the system.
The SPFS is a SWIFT alternative that ensures the transfer of financial messages between banks both inside and outside of Russia. It was created in late 2014 in response to the first wave of sanctions over Crimea’s reunification with Russia, which targeted a number of Russian banks, among other entities.
Earlier this year, as Moscow faced further sanctions in response to its military operation in Ukraine, including the disconnection of many Russian banks from SWIFT, the government started promoting the domestic system as a reliable alternative. Also due to the sweeping sanctions, Moscow accelerated efforts to move away from the dollar and euro towards making settlements in national currencies. According to Bakina, the SPFS is proving helpful in this endeavor.
“This, of course, creates a good basis for further development of settlements in national currencies, moving away from the dollar, the euro in settlements. We also see that friendly countries are becoming more willing to switch to national currencies,” Bakina stated.
The sanctions have also led to an increase in the use of Mir bank cards, Russia’s alternative to Visa and Mastercard, which suspended operations in the country and stopped the cards that were issued in Russia from working abroad. According to Bakina, a third of all bank cards in Russia are now Mir cards.
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