Russia is launching a new payment system that is “bound by no restrictions” where digital currencies could be used in cross-border payments, said Russian Finance Minister Anton Siluanov. “Two parties come to an agreement, make settlement payments, and no other country could step in and freeze such payments,” the top official explained.
Digital Currency ‘Bound by No Restrictions’ in Russia’s New Payment System
Russian Finance Minister Anton Siluanov said Monday that a new payment system will be launched where the use of digital currencies in international payments will be completely unrestricted, Russian news outlet Tass reported.
“We are launching an alternative system of payments based on modern technologies (digital financial assets, digital currencies),” the finance minister was quoted as saying. He elaborated:
Digital currencies could be used in cross-border payments. This is just at the earliest phase of discussions, but the future lies with the use of the digital ruble, the digital yuan, and other similar currencies.
“This is a system of payments that is bound by no restrictions. Two parties come to an agreement, make settlement payments, and no other country could step in and freeze such payments,” Siluanov emphasized.
Due to the economic sanctions imposed by the U.S. and other Western nations following the start of the Russia-Ukraine war, Russia has intensified its efforts to reduce its reliance on the U.S. dollar. The U.S. and Western allies have seized more than $300 billion in Russian central bank foreign currency assets frozen by sanctions.
The Bank of Russia has been exploring the creation of a digital currency, the digital ruble, as a way to shift away from the U.S. dollar. A report published by the U.S. Congressional Research Service in July 2021 details that the Russian government accelerated its de-dollarization efforts in 2014, noting that the launch of a digital ruble “would further reduce Russia’s reliance on Western (and dollar-centered) payments infrastructure.”
Russia’s De-Dollarization Push
Finance Minister Siluanov also revealed Monday at an education marathon event that the Russian ruble and the Chinese yuan are already replacing the U.S. dollar in mutual settlements between Russia and China, Tass also reported. When asked if the ruble or yuan could replace the USD, the top official replied:
We are already looking at this. For better or worse, I think, this is the current situation. This is our currency … It is replacing [dollar] already. If we look at the structure of trade between Russia and China, now more than 70%— it is already in our national currencies.