Russian Prime Minister Mikhail Mishustin at the summit of the heads of government of the Shanghai Cooperation Organization (SCO) invited the club’s members to create their own system of electronic exchange of financial information and bank payments. Analysts interviewed by Izvestia believe that the system would be another step towards moving away from settlements in dollars and euros. For Russia and China, Western currencies are becoming increasingly toxic because of the ability of European and American regulators to not only monitor but also block transactions.
Analysts suggest that the parties may talk about creating a multilateral system for the exchange of electronic information based on the Financial Messaging System of the Bank of Russia (SPFS). This sort of network should work in the same way as SWIFT does, where banks from various countries confirm transfers in foreign currency.
“Implementing such a project with SCO countries can be an excellent alternative to SWIFT. However, to become an attractive alternative for SCO countries, the system still needs to remove technical limitations. In particular, banks noted additional costs due to increased security measures, as well as the high cost of messages,” financial analyst at the CMS group of companies Vladimir Sagalaev told Izvestia.
“If a certain financial instrument based on a multi-currency basket will start working at least in several years, this will have a significant positive effect on normalizing trade between the countries of the Shanghai Cooperation Organization. Now they are complicated by the threat of sanctions from unfriendly countries,” Yelena Frolova, commercial director at Vekprom, said.