Iran seeks payment systems with Muslim nations to bypass US sanctions
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The goal of the initiative is to facilitate trade using national currencies and reduce reliance on US dollar-based systems, which are affected by sanctions.
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Governor of Central Bank of Iran Mohammad Reza Farzin (L) meets with his Turkish counterpart Fatih Karahan on the sidelines of a summit of chief bankers of the Organization of Islamic Cooperation (OIC) in Turkey’s Istanbul on September 30, 2024. (IRNA)
Iran is working to establish independent payment systems with Muslim countries to bypass US sanctions that hinder international and regional trade.
At a summit of the Organization of Islamic Cooperation (OIC) in Istanbul, Iran’s central bank governor, Mohammad Reza Farzin, discussed creating bilateral and multilateral payment systems with other OIC member nations.
"This issue has never been raised at a multilateral level ... we are seeking to have it implemented with member countries of the OIC," said Farzin.
The goal is to facilitate trade using national currencies and reduce reliance on US dollar-based systems, which are affected by sanctions.
Iran has already implemented similar systems with members of the BRICS group, such as Russia, to mitigate the effects of sanctions on its economy.
Farzin also held talks with the Turkish central bank governor Fatih Karahan to expand financial and economic cooperation, according to reports from IRNA.
Read more: Iran, Turkey to establish free trade zone as economic ties develop
Iran’s non-oil trade with OIC members rose by 14% in the first half of the year, reaching $32.2 billion.
The initiative aims to replicate Iran's success with BRICS countries across the OIC, which includes 57 members.
Alternative financial market in the making
In June, Russian President Vladimir Putin confirmed that BRICS is in the process of developing an independent payment system that will be "unaffected by political pressure, abuse, and external sanctions."
Giving an overview of the BRICS strategy of evolving a collective payment system and what the member countries, including Russia, can derive from such an arrangement, Putin said that it will be a game-changer for BRICS import/export trade.
Iran’s Central Bank governor Farzin has likewise discussed this proposal at a BRICS summit, suggesting a unified payment system known as "BRICS Pay," supported by a cloud platform and digital wallet.
The plan is designed to promote financial independence and resilience among the developing economies in the group.
Read more: Putin hails 'strategic' Russia-Iran partnership, commits to growing it
Iran and Russia have already connected their national payment systems, allowing transactions in local currencies.
The integration of Russian Mir and Iranian Shetab systems is expected to support trade and investment between the two countries, with potential expansion to all BRICS members.
