Tehran, Moscow Mull Adoption Of Russia’s MIR Payment System

Iran’s envoy to Russia has said the two countries are in talks over the possible recognition of the Russian payment system MIR, according to Iranian media.

The reports that quoted Ambassador Kazem Jalali as making the announcement have not provided further details.

MIR is a payment system for electronic fund transfers that was established by the Central Bank of Russia in 2017 following the imposition of international sanctions on the country starting in 2014.

MIR does not itself issue cards, extend credit or set rates and fees for consumers. Instead, it provides financial institutions with MIR-branded payment products that they can use to offer services to their customers. The system is currently operational in Russia, Armenia, Turkey, and the United Arab Emirates.

The Central Bank of Russia has also developed a domestic financial-communications platform, the System for Transfer of Financial Messages (SPFS), as an alternative to the global Society for Worldwide Interbank Financial Telecommunication (SWIFT) network.

Following Russia’s invasion of Ukraine, several major Russian banks have been cut from the SWIFT system.

According to Iran's Fars News Agency, more than half of Russians are said to have at least one bank card using MIR and over 25 percent of their financial transactions are done through the system.

Iran and Russia are both under US economic sanctions that are causing major problems for their banking sectors. It is not clear if adopting Russia’s MIR and SPFS platforms could help Iran become less dependent on the international banking system.

Tehran is also keen to sign a long-term cooperation agreement with Moscow. During a visit to Moscow in January, Iranian President Ebrahim Raisi presented the draft of a 20-year cooperation deal to his Russian counterpart, Vladimir Putin, that would update a 2001 version.

Tehran claims it is not taking anyone's side in the four-week war between Russia and Ukraine and has called for a peaceful settlement. However, Iran’s state media and hardliner outlets carefully avoid describing Russia’s military offensive in Ukraine as an “invasion.”

In a commentary on Thursday, the official news agency IRNA said that Iran “is against both the expansion of NATO and interferences of the West in the relations between the two neighbors.”

“It also does not consider war to be a solution for problems that exist between countries and urges all sides to refrain from violence. On the other hand, Iran believes that the Western countries' insistence on using sanctions as a tool [against Russia] is unconstructive and will cause further problems,” the agency said.

“Iran's emphasis on dialogue between the sides can resolve the existing issues and prevent problems in the future," according to IRNA.

Iranian officials, including Raisi and Supreme Leader Ali Khamenei, have consistently supported Russia's invasion of Ukraine, blaming the United States and NATO for provoking Moscow.

Khamenei has also claimed that Ukrainians were not resisting strongly to the Russian invasion "because they did not agree with [their] government." The hardline Kayhan newspaper made a similar allegation this week, referring to Ukraine’s “scarecrow” defense, while international media and experts are impressed with the strong Ukrainian resistance.

In February, Iran was among 35 countries that abstained on a UN General Assembly resolution deploring Russia’s action in Ukraine and calling for an immediate withdrawal of its forces from the country.