China and Russia Strengthen Financial Ties With Cross-Compatible Payment Infrastructure

Russia and China are forming some intriguing strategic partnerships that are not going by unnoticed. Although things have been uneasy between Russia and the rest of the world for quite some time, they are not losing track of what is important. A new payment system is being developed in Russia, which will be made compatible with China’s UnionPay. This is another strategic move to ensure that the Western world can’t get involved.

China and Russia Are In Financial Cahoots

The relationship between Russia and China has gone unnoticed by most people, even though the evidence has always been within reach for anyone who wanted to find out more. The Mir national payments card, which launched in Russia earlier in 2016, was a strong indication of what the future may hold.

At that time, President Putin wanted to show a strong response to US and EU sanctions over what happened with Crimea. The result of these sanctions saw both MasterCard and Visa cutting off financial services to Russian banks. Rather than trying to patch things up, Russia went ahead and created its own proprietary financial system, which is not accessible to Western parties.

Instead, President Putin is looking towards China as a strategic financial partner. To be more precise, the new payment infrastructure currently under development will be made compatible with UnionPay. In doing so, Putin sends another clear political message to the Western world, as they are “not invited to the party,” so to speak.

While there is nothing wrong with harmonizing national payment systems, this relationship between China and Russia can be quite a powerful coalition. Technical and logistical details still need to be figured out, though. It is possible that both the Mir and UnionPay payment cards will be cross-compatible with the other national financial infrastructure, albeit that has not been confirmed yet.

This is also another move by Russia to slowly steer away from Swift. It is a public secret how China and Russia have been developing their own version of the Swift payment network in recent years. Mainstream media has been ignoring this fact for quite some time, as they assumed that this would not have any major repercussions. Unfortunately, it looks as though there was a lot more going on behind the scenes than was originally assumed.

Keeping in mind how CIPS has been around since 2009, this new coalition between China and Russia is anything but surprising. A more fractured financial ecosystem would not do the world’s economy any favors, though. Then again, countries have to start fending for themselves, which is exactly what Russia and China are doing right now.

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