Russia Urges Shanghai Cooperation Organisation To Set Up Joint Payments Network
Such a move would cut transactional dependence from the West and usher in a new era of reliable business activity
Russian Prime Minister Mikhail Mishustin has proposed setting up a joint payment network within the Shanghai Cooperation Organization (SCO) and has urged member states to speed up the transition to using national currencies in trade.
“Our common task is to gain independence from the influence of third countries in the financial sector. For that purpose, we suggest creating a digital system for the exchange of financial information and payment transactions within the SCO,” the head of the Russian government said on Tuesday (November 1).
The SCO includes as full members China, India, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Pakistan and Uzbekistan, with Iran soon to join. Other associated countries of various SCO status include Afghanistan, Armenia, Azerbaijan, Bahrain, Belarus, Cambodia, Egypt, Kuwait, Maldives, Mongolia, Myanmar, Nepal, Qatar, Saudi Arabia, Sri Lanka, Turkiye, and the UAE.
Mishustin proposed using national platforms for interbank communications as new channels for transactions. The move, according to the official, would help cut reliance on the Western financial systems such as SWIFT, and ensure “more predictable, clear and reliable conditions” for businesses within the SCO.
Mihustin also wants to accelerate the transition to settlements in national currencies in order to move away from the US dollar and Euro. He noted that Russian President Vladimir Putin stressed last week that settlements in national currencies would gain momentum and gradually become dominant across the globe. Speaking at the Valdai discussion club last week, Putin also called for new independent financial platforms for international settlements, adding that alternative and decentralized systems would eliminate the possibility of manipulating the global financial infrastructure.
Russia and China already have their own payment networks and work is also being down on establishing a BRICS variant. The likelihood of an alternative to SWIFT is high as many countries have grown uncomfortable with the West’s use of the SWIFT network – which was originally intended to be an anti-money laundering tool – now being used for political and trade competitive purposes.