China and Russia look to ditch dollar with new payments system in move to avoid sanctions

Baku. 22 November. REPORT.AZ/ China and Russia are drafting a pact to boost the use of their national currencies in bilateral and international trade, underscoring their intent to cut their reliance on the US dollar, Report informs citing South China Morning Post.

The development of a new international financial payments system aims to address rising concerns over additional US sanctions and trade tariffs.

Russian Prime Minister Dmitry Medvedev, during his visit to China earlier this month, said the two nations were discussing the launch of a new cross-border system for direct payment of trade invoices in the yuan and the rouble.

He also said discussions were underway to allow the use of China’s UnionPay credit card in Russia and Russia’s Mir card in China.

The impetus for creating a new financial infrastructure is the continued deterioration in both countries’ relations with the United States and the threat that Washington will impose more economic sanctions on one or both of them.

The development of a new cross-border payments system could allow China and Russia to avoid using Swift for many transactions, potentially allowing them to circumvent any US sanctions.