The Ukraine conflict has shown that the West’s SWIFT network has become a political pressure tool, PSB’s Pyotr Fradkov has said
Russia has the capability to set up its own comprehensive cross-border payment network that would be domestic in origin, but international in function, the chairman of Promsvyazbank (PSB), Pyotr Fradkov, has said.
In October 2024, PSB launched the A7 system of international payments, which according to its website, now services 2,000 transactions of various sizes on a daily basis and already accounts for some 20% of all foreign trade settlements by Russian companies.
The creation of the system was a response to the sanctions placed on Russia by the US and EU after the escalation of the Ukraine conflict in February 2022, which included the disconnection of almost all of the country’s banks from the SWIFT global settlement network, Fradkov said in an interview with RBK on Monday.
After the restrictions were introduced, it became obvious that Western financial instruments “can be a tool for political pressure and influence,” the banker explained.
In such conditions, Russia “needs to create its own payment framework – domestic in origin, but international in function. We have plenty of both technical solutions and financial capabilities,” Fradkov insisted.
“PSB, together with the A7 cross-border payment system, is developing one of these projects for a new payment architecture where payment does not depend on the approval of a third party,” he said.
The goal of the A7 system is “to form our own payment infrastructure capable of conducting international operations independently of external restrictions,” the PSC chairman explained.
“The system is designed in such a way that, even after being sanctioned repeatedly, in various forms and types, the company continued its activities in processing payments for our clients,” he said.
Frabkov explained that from a legal point of view “no sanctions are being violated [by A7] because there is no such thing as a cross-border payment. It’s precisely that which has restrictions. There are distributed liquidity pools that exist worldwide in various currencies. If you take the jurisdiction of each individual country where we operate, then within it, this is absolutely normal, standard business that complies with all the regulations of that country.”
A7 is designed not only to bypass sanctions, but also be a competitive product on the international market that can be conveniently used by other countries to trade not only with Russia, but also with each other, he said.
According to the banker, it is important that Russia is “not unique” in developing a domestic settlement system as “many countries are following this path – Indonesia, Brazil, and others.”
“We are witnessing a global shift where the international payment infrastructure is beginning to be replaced by a list of national systems,” he noted.
