Kathmandu— Russia is building a comprehensive, cross-border payment network designed to circumvent Western sanctions and offer an alternative international financial infrastructure, according to Pyotr Fradkov, chairman of Promsvyazbank (PSB). The A7 system, launched in October 2024, currently processes around 2,000 transactions daily and accounts for approximately 20% of all foreign trade settlements made by Russian companies. This development follows the disconnection of many Russian banks from the SWIFT network after the escalation of the Ukraine conflict in February 2022, prompting Russia to seek independent financial solutions. The system aims to provide a secure payment framework not subject to external political pressure and potentially serve as an international option for trade beyond Russia.

Sanctions Prompt System Development

The creation of the A7 system was directly spurred by sanctions imposed on Russia by the United States and European Union following the events in Ukraine, Fradkov explained. These restrictions included cutting off most Russian banks from SWIFT, a key global settlement network. He stated that these actions demonstrated how Western financial instruments “can be a tool for political pressure and influence.”

In response, Russia recognized the need to establish its own payment framework – one originating domestically but functioning internationally. Fradkov emphasized that Russia possesses both the technical expertise and financial resources necessary to achieve this goal.

A7 System Architecture

PSB, in conjunction with A7, is developing a new payment architecture designed to eliminate reliance on third-party approvals for transactions. The system’s structure allows it to continue processing payments even after facing repeated sanctions, Fradkov noted.

From a legal standpoint, the A7 system avoids violating sanctions by structuring transactions as distributed liquidity pools operating within the jurisdictions of various countries, ensuring compliance with local regulations. This approach circumvents restrictions typically associated with cross-border payments.

Global Ambitions and Competition

A7 is not intended solely to bypass sanctions but also to function as a competitive product in the international market, offering convenient trade options for countries beyond Russia. Fradkov envisions A7 facilitating commerce between nations independent of Russian involvement.

He highlighted that Russia isn’t alone in pursuing domestic settlement systems, citing similar initiatives in Indonesia, Brazil, and other countries. He observed a broader global trend toward replacing the existing international payment infrastructure with a network of national systems.

The A7 system continues to expand its transaction volume and geographic reach, aiming to establish itself as a viable alternative within the evolving landscape of international finance.

(With inputs from RT)

Originally published on abcnews.com.np.