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Iran, Russia merge banking systems, launch own payment system after SWIFT ban

Russia and Iran are merging their banking systems to get around being banned from SWIFT, the critical communication system for global bank payments.

Several Iranian central bank officials confirmed the partnership with Russia’s central bank on Monday, Reuters reported.

Since 2018, Iran has been disconnected from SWIFT, while many Russian banks (

VTB, Otkritie, Novykombank, Promsvyazbank, Rossiya, Sovkombank and VEB (Vnesheconombank), Sberbank, Rosselkhozbank and others) were kicked off the platform following Moscow’s invasion of Ukraine in 2022.

The new communication system forged by Iran and Russia will connect roughly 700 Russian banks and 106 foreign banks from 13 other countries, Mohsen Karimini, the deputy governor of Iran’s central bank, said.

Russia plans to use the new system to increase its trade volume with Iran to $10 billion a year, according to a recent report. As well, the two countries plan to develop a gold-backed cryptocurrency to challenge the US dollar.

“Iranian banks no longer need to use SWIFT … with Russian banks,” Karimi told a local news outlet.

Iran is one of the few countries in the world providing military aid to Russia in its invasion of Ukraine. Russia has used hundreds of Iranian-made Shahed kamikaze drones to destroy Ukrainian critical infrastructure and a deal to purchase Iranian ballistic missiles has been in the making, although apparently has not yet materialized.

 

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