The Russian government is working on creating a new mechanism that would allow cross-border settlements with counterparties in friendly countries, a federal official told Vedomosti.

It is noted that for this the Financial Messaging System of the Bank of Russia (SPFS) will be docked with national SWIFT counterparts in other countries.

On November 1, Russian Prime Minister Mikhail Mishustin, during a meeting of the heads of government of the Shanghai Cooperation Organization countries, proposed developing their own system for conducting interbank payments and electronic exchange of financial information. Mishustin said for cross-border payments, national interbank telecommunications platforms can be used.

The docking of national settlement systems will simplify the use of the platform for banks of counterparty countries, since the work will be carried out on the basis of the national payment infrastructure.

Both financial and technological investments will be required to bring into life the proposal, the official explained, without specifying the cost of creating such a system.

“Currently, the idea is in its initial stage, and it is “not easy”, because the task is not to create an alternative to SWIFT, but to develop a system that allows you to work in national currencies,” the paper’s interlocutor said.

The issue of creating a new infrastructure for settlements with China has been discussed since 2019. At that time the countries decided to create an alternative mechanism in case of cutting off from SWIFT, but the topic was not continued. In 2018, the EU developed this idea together with Russia - the countries planned to create a European platform for settlements with Iran, which is not connected to SWIFT.

More than 11,000 financial institutions in about 200 countries of the world are members of SWIFT. In Russia, the analogue of the SWIFT system is Financial Messaging System of the Bank of Russia. It was created in 2014 after the issue of cutting off Russia from SWIFT was first raised in connection with the annexation of Crimea. 440 participants joined the SPFS, including more than 100 non-residents from 12 countries. Iranian banks, in particular, are connecting to the Russian analogue of SWIFT, Deputy Prime Minister of Russia Alexander Novak said recently.

At the same time, the number of Russian credit institutions that connect to the Chinese CIPS system is growing. It was launched in 2015 to develop the global use of the Chinese currency. In this way Beijing wanted to protect itself from US intelligence, which has access to the international SWIFT system, the Financial Times wrote.

Most of the Shanghai Cooperation Organization member countries have their own internal messaging systems, so everyone has a basis for creating an integrated system, said Alma Obayeva, Chairman of the Board of the National Payments Council.

According to her, messages within the SPFS are standardized, they are transmitted in the so-called SWIFT-oriented formats. If the counterparty country has its own system, created based on international standard, there should be no difficulty in docking, the expert believes.

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