Russia’s SWIFT alternative expanding quickly this year, says

An exterior view shows the headquarters of the Central Bank of Russia in Moscow, Russia, March 29, 2021. A sign reads ‘Bank of Russia’. REUTERS/Maxim Shemetov

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  • This content was produced in Russia, where the law restricts coverage of Russian military operations in Ukraine

KAZAN, Russia, September 23 (Reuters) – The reach of Russia’s alternative to the international messaging system SWIFT has grown at a record pace this year, the central bank said on Friday, as Moscow steps up efforts to address financial shortcomings caused by sanctions.

Sweeping Western sanctions against many of Russia’s top banks after Russia deployed tens of thousands of troops to Ukraine have severely restricted lenders’ access to the global financial system. SWIFT supports financial transactions worldwide.

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Alla Bakina, director of the central bank’s department for national payment systems, said that this year 50 new companies joined Russia’s alternative system, bringing the total to 440, of which more than 100 are non-residents.

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“The financial news transmission system has shown expansion this year as more foreign participants have joined,” Bakina said at a banking forum in Kazan.

“More participants joined the SPFS in the first half of the year than in any previous year the system has existed,” she said.

The central bank does not disclose the list of countries whose institutions have joined the SPFS, Bakina said.

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Some banks in Russia, including units of some foreign financial institutions blocked from leaving by recent Kremlin laws, still have access to SWIFT and can process payments abroad.

More than 11,000 financial institutions in more than 200 countries and territories use SWIFT.

Sanctions have increased use of the SPFS and issuance of Mir bank cards, Russia’s alternative to Visa (VN) and Mastercard (MA.N), companies that have ceased operations in Russia and their Russian-issued cards are up and running hired abroad.

Bakina said a third of all bank cards in Russia are now Mir cards.

But Mir – which means “world” or “peace” in Russian – faces headwinds abroad. Banks in so-called “friendly” countries – Turkey, Kazakhstan, Vietnam and Uzbekistan – have halted Mir transactions following the latest round of US sanctions. Continue reading

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Washington added National Card Payments System (NSPK) head Vladimir Komlev to its sanctions list, prompting some foreign banks to withdraw their support.

Cuba, South Korea and a handful of former Soviet republics have allowed Mir cards to be used, but Komlev said Thursday the NSPK has stopped disclosing the list of countries where the cards are accepted. Continue reading

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Reporting by Alexander Marrow; Edited by Jan Harvey

Our standards: The Thomson Reuters Trust Principles.

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