FX.co ★ Russia connects to Chinese alternative to SWIFT

After most of the Chinese banks refused to connect to the Russian alternative of SWIFT, Russian banks had to connect to the Chinese payment system. This cooperation implies the possibility of conducting transactions between the two countries much faster. As stated by Vladimir Shapovalov, the head of the division dealing with foreign regulators at the International Cooperation Department of the Central Bank of Russia, the connection to the CIPS systems allowed Russian banks to facilitate payments routing procedure. Notably, the connection to the Chinese alternative to SWIFT is not the only precaution against the total banking isolation of Russia. The Central Bank did not waste time and at the end of last year, created its own system for transfer of financial messages (SPFS). If necessary, the SPFS network will allow users to make settlements and monitor the movement of the system participants' funds. Unfortunately, it is quite difficult to find these participants. So far, only Iran is considered to be a potential participant which is actively trying to abandon the US dollar in mutual settlements as well. Interestingly, the countries have been successfully implementing the agreement on using the national currencies in trade settlements. Vyacheslav Kholodkov, the expert of the Center for Economic Research at RISI, noted that the current situation forced Moscow and Tehran to take urgent measures.