In the latest example of U.S. sanctions sparking new financial ties between out-of-favor countries, Iranians will soon be able to make payments with Russia’s Mir bank cards. The move will provide some relief to everyday Iranian people and businesses victimized by economic sanctions.
“I think this payment system will be activated in Iran soon,” Iranian Deputy Foreign Minister for Economic Diplomacy Medhi Safari said Wednesday, according to Russia’s RIA news. Mir translates into both “the world” and “peace.”
The Mir card system was introduced by Russia’s central bank in 2015 after MasterCard and Visa were forced by the U.S. sanctions regime into terminating business with several Russian banks. Up to that point, MasterCard and Visa accounted for 90% of payments in Russia. After Russia’s February invasion of Ukraine, remaining Russian banks lost their Visa and MasterCard relationships.
Russia’s Mir arrangement with Iran is just the latest of many examples of tightened economic relations between the two targets of U.S. sanctions.
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“The two are also working to create a rival to the SWIFT payments messaging service that underpins cross-border payments across the global economy,” reports Reuters.
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On Tuesday, Iranian economic minister Ehsan Khandouzi announced that the U.S. dollar had been officially replaced by the ruble in Iran’s trade with Russia, and that work is underway to replace the dollar in business with China, Turkey and India.
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Also this week, Iran and Russia entered a deal by which Iran will supply aircraft parts and maintenance services to Russia.
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On July 19, Russian President Vladimir Putin traveled to Tehran and met Supreme Leader Ayatollah Ali Khamenei and President Ebrahim Raisi, along with Turkish President Tayyip Erdogan.
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On the eve of Putin’s visit, Russian gas producer Gazprom and Iran’s national oil company signed a $40 billion deal in which Gazprom will help develop oil and gas fields, and complete liquefied natural gas facilities and gas export pipelines.
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In June, Iranian state media announced a test of a new trade route linking Russia and India via Iran.
Despite the West’s economic warfare, the ruble is actually stronger against the dollar today than it was before Russia’s invasion of Ukraine. To the extent sanctions encourage a growing list of countries to engage in non-dollar-denominated transactions, a weaponized dollar may ultimately explode in America’s face.