Is the Russian Mir destined to collapse?
More and more countries are withdrawing from Mir, Russia's alternative to Western payment circuits. Here because. Marco Orioles's article
Things are going badly for Mir, the Russian alternative to the Visa and MasterCard circuits, on which Putin had relied on to continue getting the ruble accepted abroad despite Western sanctions.
After Turkey's step backwards, those of the main banks of Armenia, Egypt, Kazakhstan, Tajikistan, Uzbekistan and Vietnam have also arrived, which have announced the suspension of transactions or that they are no longer interested in an agreement.
The warning from the USA
The banks' decision came after the US Treasury warned them of the risk of incurring secondary sanctions.
Although Russia's National Payment Card System (NSPK), a US Treasury note reads, "is not an entity blocked (by sanctions regulation), NSPK and Mir conduct transactions for Russian banks under sanctions and can be used to conduct transactions involving other subjects or sanctioned activities ".
Therefore, the Department concludes, "non-American financial institutions that enter into agreements with NSPK risk supporting Russia's efforts to evade US sanctions".
Countries that use Mir
For the approximately 116 million credit cards of the Mir circuit, the options have thus been drastically reduced. Only Belarus, Kyrgyzstan, South Korea, and the breakaway territories of Abkhazia and South Ossetia in Georgia are left to accept payments with these cards.
Very few are still considering the use of Mir for the foreseeable future: Cuba, Iran, Malaysia, Nicaragua, Nigeria and Thailand.
The backward step of Egypt
Even last month in Egypt everything seemed ready for the adoption of Mir.
As reported by the Egypt Independent , the head of the Planning and Budget Commission of the Egyptian House of Representatives, Fakhry al-Feki, stated in September that Egypt planned to connect the Meeza circuit with Mir by the end of the year.
Speaking with the Russian broadcaster RT, Feki explained, according to the Egypt Independent, that the connection between the two circuits would have facilitated transactions in rubles with particular regard to the payment of Russian cereals and the revitalization of Russian tourism in Egypt.
It is worth remembering that Egypt is among the top five destinations for Russian tourists and that thanks to tourism, the country has huge reserves in foreign currency. In 2021, the revenues for this sector amounted to 13 billion dollars.
Now, however, a banking source reveals to Al Monitor , Egypt has definitively put aside the plan to introduce the Mir system in its resorts and hotels.
The fear is always the same: ending up in the mesh of US sanctions. As a source from the National Bank of Egypt told Al-Monitor, "the sanctions imposed on Russia by the US and its European allies have forced Egyptian decision makers to withdraw their support for the Mir system."
But Egypt would also have another concern: It is negotiating a loan with the IMF to support its economy plagued by a serious shortage of foreign exchange. So now is not the time to antagonize the US, which holds 16% of the votes in the IMF.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/mir-russia-ritiro-banche/ on Thu, 13 Oct 2022 06:16:39 +0000.