Foreign banks willing to join Russia’s alternative to SWIFT

Banks based in several states are planning to participate in the Russian-developed money transfer network that serves as an alternative to the traditional SWIFT system, according to the head of the Central Bank of Russia (CBR).

“It is open for external connection, we are developing it for our trade partners if they want to join. This work is already ongoing and banks of several countries are going to join, test connections already exist,” Elvira Nabiullina said at the first EU-Russia Student Conference in Moscow on Saturday. “We think it will be developing.”

Moscow started working on its own payment service, which is dubbed the SPFS (System for Transfer of Financial Messages), amid threats that it could be disconnected from the internationally recognized SWIFT (Society for Worldwide Interbank Financial Telecommunication) system back in 2014.

The CBR governor said the Russian alternative network operates the same standards as SWIFT. It’s convenient for those joining it as they do not have to change their internal mechanisms. Moreover, not just banks but also large businesses can join directly and some have already done so, she added.

Meanwhile, the SPFS is being already used in Russia, where 18 percent of money transfers are going through it. Banks can therefore choose what system they want to use and “quickly switch” in case of any risks, according to Nabiullina.

Earlier this year, Russia’s central bank announced that the country’s alternative to SWIFT had made “significant progress” as it already complies with international standards and foreign players can be integrated in it. In April, the regulator said it had signed agreements with two non-residents and was holding talks with five more. Joining the network allows foreign players to bypass Western sanctions, enabling them to cooperate with Russian companies hit by the restrictions.

Domestically, some 500 participants, including major Russian financial institutions and companies, have already joined the SPFS network.

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