MOSCOW (Reuters) - Russia wants a mutually-compatible payments system with China in order to reduce the risk from further financial sanctions by the West, Prime Minister Dmitry Medvedev said in an interview published on Friday.
Russia has introduced a new national payment system to cut reliance on Western systems, such as Visa and MasterCard. Those operators stopped providing services to clients of one Russian bank after Washington imposed sanctions over Moscow’s role in the Ukraine crisis.
Medvedev, who is to meet his Chinese counterpart in Russia next week, told China Central Television that Moscow was looking for ways to make Russia’s new system compatible with Chinese payments systems.
The Russian payment system is called Mir, which translates as “World” or “Peace”, while China has a system called UnionPay.
“We are currently considering ways of harmonizing our national payments system; both the card that we are going to issue, the Mir card, on the one hand, and the UnionPay system, on the other hand. We believe that this would enhance the reliability of financial settlements,” Medvedev said according to an interview transcript released by his office.
Russia has been largely integrated into the global economy since the 1991 collapse of the Soviet Union. But the Ukraine crisis, the biggest confrontation since the Cold War, has led officials to look for ways to reduce reliance on the West.
After hitting Russian officials and lawmakers with visa bans and asset freezes over the annexation of Crimea, the United States and European Union are threatening measures affecting entire economic sectors if Russia escalates the crisis.
Visa and MasterCard stopped providing services for payment transactions for clients at private lender Bank Rossiya, under U.S. sanctions over what the West says is Russia’s illegal annexation of Crimea from Ukraine and support for separatists in eastern Ukraine.
Medvedev said his proposal would cut reliance on global payment systems, including SWIFT, the network which supports most electronic transactions.
“In this respect, this kind of cooperation is very useful because in this situation no one will be able to block the development of financial traffic,” Medvedev said.
“I believe that the use of the yuan in mutual settlements, the use of positions opened in yuan and rubles, mutual financial transaction technologies, and the use of co-branding cards – all of this is very useful for our countries,” Medvedev said, according to the transcript.
Editing by Christian Lowe and Richard Balmforth