Kremlin Reveals Plans For Independent Russian-Chinese Financial System

February 6, 2022 9:33 pm

Russia and China are currently partnering on creating a new independent financial system that will allow the two countries to be interlinked economically without being influenced from other foreign nations.

This new partnership seems to be a response to warnings from Western nations where disconnecting Russia from the SWIFT financial network would be used as a form of sanctions against the country.

Currently, the SWIFT network is the dominant financial network that holds the majority of international transaction volume and many nations are dependent on it.

The network and its transactions are based on the United States dollar and both countries have expressed interest in moving away from the USD to avoid being over-reliant on it for international trade.

RT.com reports:

During the talks on Wednesday, Russian President Vladimir Putin and his Chinese counterpart Xi Jinping called for increasing the share of national currencies in mutual settlements and expanding cooperation to provide Russian and Chinese investors with access to stock markets, said Yuri Ushakov, Putin’s foreign policy advisor.

Ushakov said “particular attention was paid to the need to intensify efforts to form an independent financial infrastructure to service trade operations between Russia and China.”

“We mean creating an infrastructure that cannot be influenced by third countries,” the Kremlin aide added.

Ahead of the video summit, Kremlin Press Secretary Dmitry Peskov hinted that economic discussions were likely to be on the agenda for the two heads of state.

Both Russia and China are said to be increasingly looking to move away from using the US dollar as the main currency of international trade, instead using their own denominations to underpin the booming volume of Moscow-Beijing trade.

The possible sanction of removing Russia from the SWIFT network was considered by Washington as an option if Russian troops invaded Ukraine.

Igor Sechin, who runs the Russian state-owned oil giant Rosneft, shared his comments on this possible decision as well.

He commented that Washington was manipulating the USD through the Federal Reserve in order to further its own interests.

In the past year during the pandemic, the Federal Reserve has been increasing the supply of money in efforts to help recover the economy, but many have speculated that this has caused inflation concerns and may have made other currencies more attractive such as cryptocurrencies like Bitcoin or other fiat currencies.

RT.com concludes:

At the end of November, the boss of Russia’s state-run oil giant Rosneft, Igor Sechin, accused Washington of manipulating the dollar to further its own interests and said the currency was losing its appeal due to the US Federal Reserve’s policy of quantitative easing – essentially flooding the global economy with an excess supply of money.

Earlier this year, Russian Foreign Minister Sergey Lavrov suggested that Beijing and Washington “need to move away from the use of Western-controlled international payment systems.” The top diplomat also accused the US of seeking “to limit the technological development opportunities of both the Russian Federation and the People’s Republic of China.”

Recently, it seems that there is an emphasis for the need of a payment network and currencies that are not able to be manipulated by anyone and are transparent to the public.

Perhaps the advancement of blockchain and cryptocurrencies will help resolve this problem once and for all in the future.

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