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Russia’s Alternative to Western Credit Card Debuts in London

Russia will next year diversify its foreign currency holdings in its National Wealth Fund

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Employees demonstrating a payment card
Employees speak while demonstrating a payment card during a tour at a branch of VTB bank in Moscow, Russia. VOA

A Russian backed bank payment card, introduced after Western sanctions upended Russia’s financial system five years ago and prompted Visa and Master card to deny electronic services to some of the country’s leading banks, is set for its European debut on London Wednesday, when a pilot project will be launched in collaboration with the Dutch global payment company PayXpert.

Moscow authorities hoped to get the MIR card accepted eventually in foreign markets, but progress has been slow outside Russia for the MIR payment system,  which operates outside of Western-controlled international financial systems such as Swift, which banks use to transfer money.

The pilot project with PayXpert “will lay the foundation for new promising trends in the foreign expansion of Russian payment cards,”  according to Vladimir Komlev, the head of Russia’s National Card Payment System, which operates the MIR system.

De-dollarization efforts

The effort is seen by analysts as part of the  Kremlin bid to de-dollarize the Russian economy to lessen the sting of Western sanctions. A Russian Finance Ministry official this month told Reuters that Russia will next year diversify its foreign currency holdings  in its National Wealth Fund, which supports Russia’s public pension system, aiming to lower the share of dollars in the fund’s reserves.

Dmitry Dolgin of the Dutch banking group ING said in  a report this month that de-dollarization efforts are now obvious across most sectors, including local business loans and bank-held international assets, although he said the dollar’s role  has actually increased in company and household savings and cash assets, partly because dollar interest rates have been higher than those offered for euros.

Credit Cards offers unique features
American Express, Visa and Master Card is displayed in this image. Each Credit Card offers unique features and benefits, along with unmatched privileges. Pixabay

U.S. authorities have been able advance sanctions by targeting companies that use dollars, and the establishment of electronic payment systems not tied to the dollar or largely controlled by U.S. businesses is one way for the Kremlin to reduce the impact of the West’s serial punishment of Moscow. Washington and the European Union have imposed a wave of sanctions since 2014 to punish Russia for the 2014 annexation of Ukraine’s Crimean peninsula, alleged meddling in the 2016 U.S. elections, and the poisoning of a defected Russian spy in England.

Komlev told Reuters this year that “In the next three years we want MIR cards to be operational in countries where Russians are used to traveling.” He projected MIR cards would be operational at some banks in at least a dozen countries by the end of this year. Turkish banks started to conduct transactions this year with MIR, which means both “peace” and “world” in Russian.

MIR was launched initially as a national payment system, with the first cards issued in December 2015. Russia’s leading bank, state-owned Sberbank, started issuing them in October 2016, and by the end of last year more than 70 million MIR-based cards had been issued by 64 Russian banks. The Kremlin has mandated that state welfare and pension payments must be processed through the system by next year, along with salaries paid to civil servants.

The card has a long way to go before it rivals VISA our Mastercard internationally. It is not accepted by international shopping platforms or major online booking services for airlines and hotels, although APEXX Fintech, a British start-up global payment company, said Thursday it would now start working with the MIR system. Among smartphone applications only Samsung has concluded an agreement with the MIR system.

Meanwhile, de-dollarization has been moving quickly. Russia’s Central Bank has currency swap deals in place with Iran, China and Turkey, allowing direct trade to be conducted in local currencies instead of U.S. dollars. Russia reportedly lost $7.7 billion in its bid to reduce dollars held in its reserves. Some of the dollars were turned into gold, and since January the bank has purchased 96.4 metric tons of gold.

People stand in line as they wait to enter the bank with their card
People stand in line as they wait to enter a branch of Sberbank of Russia bank. VOA

Alexei Zabotkin, head of the Russian Central Bank’s monetary policy department, has conceded that it would be impossible to completely empty the country’s foreign exchange reserves of dollars, as this would be  “fraught with excessive risks.” According to central bank data the  National Wealth Fund has $45.5 billion, 39.17 billion euros and 7.67 billion British pounds.

In August, the state-controlled Rosneft oil giant announced it would stop using the U.S. dollar for its export contracts.

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Nonetheless, analysts say there are limits on how far Russia can de-dollarize – the ruble is highly volatile and remains unattractive for investors and de-dollarization brings additional and sometimes prohibitive trading costs.

European regulators will be watching the London project closely. EU officials have been sympathetic about Russia’s de-dollarization bid, suspecting that as a spin-off the euro will be boosted as an international currency. In June the European Commission concluded that “the euro clearly stands out as the only candidate that has all the necessary attributes of a global currency that market participants could use as an alternative to the U.S. dollar.” (VOA)

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Thailand Set to Enter the Clash of Hosting the 2026 Youth Olympics

Thailand is all set to express interest in hosting the games in 2026

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thailand
Thailand may show interest to host the Youth Olympics in 2026. Pixabay

According to International News Thailand is set to become the latest country to enter the fray for hosting the 2026 Youth Olympics. India, Russia and Colombia are already vying to host the event and according to reports in the Thai media, Thailand hopes to launch a joint candidacy from Bangkok and Chonburi.

Kongsak Yodmanee, Governor of the Sports Authority of Thailand, said they plan to send their intention to bid to the International Olympic Committee (IOC) within the next week, according to Thai newspaper Daily News.

Yodmanee further said that the bid will be done on an urgent basis so that Thailand can “catch up with India.” Indian Olympic Association (IOA) President Narinder Batra had said earlier that India will increase its push for hosting the 2026 Games after the ongoing freeze in the sporting calendar due to the coronavirus pandemic.

Thailand Olympics
The International Olympic Committee (IOC) is yet to announce when they will reveal who gets the hosting rights for the 2026 Youth Games. Wikimedia Commons

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The Colombian Olympic Committee said in February that it had approved Medellín as a candidate for the 2026 Games, while Russia has reportedly earmarked Kazan.

The International Olympic Committee (IOC) is yet to announce when they will reveal who gets the hosting rights for the 2026 Youth Games. Hosting rights are normally provided about five years before the event which means that a decision could come as early as as 2021. (IANS)

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Russia Registers 2nd Highest COVID Cases Globally, Surpasses Spain and UK

Russia registered 232,243 cases on Tuesday, 2nd highest globally

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coronavirus
Establishing a new world order in the times of corona will not be an easy task. Pixabay

The number of coronavirus cases in Russia has increased to 232,243 on Tuesday, the 2nd highest number of infections in the world surpassing the tallies in Spain and the UK, the country’s anti-coronavirus crisis centre said.

The tally surged to 232,243 after the 10,899 cases were reported over the past 24 hours, TASS News Agency quoted the centre as saying.

A total of 43,512 patients have recovered, while 2,116 people have died, it added.

According to the centre’s data, the daily growth rate on Tuesday was 4.9 per cent compared to 5.6 per cent the day before.

healthcare workers COVID-19
The centre’s data revealed that the daily growth rate on Tuesday was 4.9 per cent compared to 5.6 per cent the day before. VOA

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As of Tuesday, the number of coronavirus cases in Spain and the UK stood at 227,436 and 224,332, respectively, according to the Washington-based Johns Hopkins University.

Italy came in the fifth place with 219,814 cases, while the US accounted for the highest number of infections in the world at 1,347,936. (IANS)

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Russia celebrates 75th Victory Day amid pandemic; Large-Scale Celebrations Postponed

Many celebrations will take place virtually

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Moscow Victory Day 75th anniversary logo. Wikimedia Commons

Russia on Saturday celebrated the 75th anniversary of the Soviet Union’s Victory over Nazi Germany in the 1941-1945 Great Patriotic War amid restrictions imposed due to the coronavirus pandemic.

Large-scale celebrations have been postponed to a later date, however, many of them will be held online, so Russians will be able commemorate the day without leaving their homes, reports TASS news agency.

Addressing the nation, President Vladimir Putin said: “We will necessarily celebrate the jubilee date as usual – widely and solemnly and will do it with dignity as our duty tells us with regard to those who went through sufferings, achieved and accomplished this Victory.

“We will have both our main parade on Red Square and the Immortal Regiment people’s march.”

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“We will have both our main parade on Red Square and the Immortal Regiment people’s march.”, President Vladimir Putin said while addressing the nation. Wikimedia Commons

Putin is slated to lay flowers at the Eternal Flame at the Tomb of the Unknown Soldier in the Alexander Gardens, Moscow.

The traditional Victory Day parade this year was supposed to be larger than usual in honour of the anniversary, but due to security reasons it was postponed to a later date after restrictions were lifted.

However, celebratory military air show will still be held this year in 47 Russian cities, involving about 600 aircraft and helicopters.

Meanwhile, Immortal Regiment’s march will be held online, said the TASS news agency report.

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Everyone can upload photos of their ancestors and their war stories to the event’s website, which will be used in a video and broadcast on federal channels, screens in metro trains, online.

Firework shows will be held in 29 cities of Russia.

The Russian Foreign Ministry reported that events organized abroad by diplomatic missions will also be held online. (IANS)