The central banks of Iran and Russia are in talks for connecting the Iranian financial system to Russia’s Mir payment network, a deputy minister of economy said in Tehran.
"[If and when] an agreement is reached, the Russian payment network would be used for making financial transactions between the two sides in the first phase, even though the Russian network is already used in some countries," Qorban Eskandari was quoted as saying by ILNA.
Eskandari said the Iranian financial system now has the infrastructure needed for joining the Mir system.
The measure is expected to help ease financial transactions between the two countries, he added, without providing details.
The Russian national payment system Mir, which translates as "World" or "Peace", was created in July 2014 with the goal of reducing risk from further financial sanctions by the West and cut reliance on western systems, such as Visa and MasterCard.
Countries like Cuba and South Korea have joined the payment service while Mir cards work in several former Soviet republics as well as in Turkey. Reports say the United Arab Emirates also plans to join Mir.
After the sanctions were announced on Russia for invading Ukraine in February that cut off Russian bank access to SWIFT, Tehran and Moscow decided to create a rival to SWIFT for cross-border payments.
Blockchain policymakers and developers in the two countries are also considering blockchain and crypto as an alternative for two-way trade.
Anton Tkachev, deputy of Russia’s Duma, said during a recent visit to Tehran that the two sides have the technological potential for crypto collaboration.
The Iran Currency Exchange (ICE) listed the ruble-rial trading pair in July, following a trip to Moscow by the Iran’s central bank governor, Ali Salehabadi, earlier in the month.
The new arrangement means the two countries can now settle trading debts in each other’s currencies. The first trade took place on July 19, with a 3 million rubles ($48,000) exchange.
That was the day Russia’s President Vladimir Putin arrived in Iran for talks with President Ebrahim Raisi and Supreme Leader Ali Khamenei, Forbes reported.
Iranian media have reported that the new system could reduce the demand for dollars by $3 billion a year. Bilateral trade between Iran and Russia was worth $4 billion in 2021. But finding common cause in their approach to the West, the two countries say they are hoping to ramp up bilateral trade to $8 billion in the short-term.
