China & Russia to sign deals for switching payment method to national currencies

Russia and China would be signing agreements to switch the payment method to national currencies in order to de-dollarize the economy. Moscow scrapped the American Visa and Mastercard usage after the corporations pulled out over the Ukraine invasion. Russia then decided to switch to the Chinese card system instead and its largest state bank Sberbank issued Mir cards with China's UnionPay. 

The two sides agreed to deepen the financial, trade and economic cooperation, particularly in the national payment card systems. They affirmed to make a deal within the framework of Russian and Chinese legislation in order to provide support to commercial banks in their independent decision-making on joining the payment system in the state of the other side. Allies Russia and China will be developing bilateral payments in national currencies, encouraging and expanding the use of national currencies, particularly through the promotion of their use when signing international trade contracts, Tass reported. 

Making financial payment method permanent

The Russian government will sign relevant agreements with the Chinese government to make the alternative financial method permanent that it adopted after it was banned from the international payment system SWIFT by the US and its ally EU. The announcement was made on Moscow's official portal of legal information. The draft decree approved through that government document accessed by state-affiliated Tass reads: "Settlements and payments for goods, service and direct investments between economic entities of the Russian Federation and the People’s Republic of China will be made in accordance with the international practice and the legislation of the sides’ states with the use of foreign currency, the Russian currency (rubles) and the Chinese currency (yuan)." It further informs that the economic entities have agreed on the choice of the payment currency and the way of payment independently.

Iran had similarly announced plans to de-dollarize its economy and do away with the repercussions of the United States imposed sanctions. Kremlin's press secretary and spokesperson for the President of the Russian Federation Dmitry announced that Tehran and Moscow both will gradually move away from the use of the dollar in bilateral relations. Peskov told reporters of the state-affiliated agencies that Iran "will move away from the practice of using dollar" and switch to SPFS, Moscow's domestic 'System for Transfer of Financial Messages' equivalent of the SWIFT financial transfer system designed by the Central Bank of Russia to make transactions in own currency.