September 12, 2023

Myanmar Will Start Accepting Russian ‘Peace’ Bank Cards Next Month

The Irrawaddy

Myanmar will begin accepting cards from the Russian Mir payment system in October, according to Kan Zaw, the junta’s minister of Investment and Foreign Economic Relations said on Monday.

He made the comment to reporters on the sidelines of the Eastern Economic Forum (EEF) in Vladivostok, Russia on the first day of the three-day forum.

A junta propaganda newspaper—quoting Russian propaganda news outlet Sputnik—also said an agreement on Mir cards had been signed between the central bank and six commercial banks. It quoted experts who said the Mir cards will be able to be used at the card payment platforms of six banks in Myanmar.

“Mir cards could be used starting from October, I hope,” Kan Zaw said at the forum.

Mir, which means “Peace” in English, is a card-payment system for electronic-fund transfers established by the Central Bank of Russia in 2017, following sanctions imposed by Western countries. The Mir card is operated by the Russian National Card Payment System.

Myanmar is now using the yuan to pay for Russian petroleum products but an agreement on mutual conversion of national currencies between Russia and Myanmar is being negotiated, Kan Zaw said at the forum.

“We are using yuan and not (paying) with roubles at the moment. But we are trying to make a Kyat-Rouble agreement,” he said, adding that the agreement would be signed “very soon.”

In June, the governor of the junta-controlled Central Bank of Myanmar, Than Than Swe, said Mir cards could be used in Myanmar within six months once technical issues were resolved and mutual certification for connecting national payment systems, especially for cross-border transactions, was completed.

Junta officials announced plans to use the Russian cards in August of last year as they faced increasing financial sanctions and dwindling foreign reserves, particularly US dollars, following the 2021 coup and subsequent deadly crackdowns on protesters and resistance forces.

Russia created Mir to avoid reliance on Visa and MasterCard, which have since stopped operating in the country. The withdrawal of Visa and MasterCard from Russia led to increased use of Mir cards in the country. However, Mir cards are unwelcome in most other countries.

They are accepted in a handful of former Soviet republics and a few countries, like Vietnam, offer limited use of the cards. Last year, state banks in Turkey suspended the use of Mir cards over fears of US sanctions on the Russian National Card Payment System.

If the Mir card is used in Myanmar, it will allow direct payments between the Rouble and the Kyat, but its use will be very limited.

Economists in Myanmar said that the Russian cards will be used by foreign nationals visiting Myanmar for pleasure or business, not by Myanmar citizens traveling abroad.

At the EEF, Kan Zaw also said the junta hopes to conclude an agreement with Russia on tourism, according to Russian state-owned news agency RIA.

However, Russia is not near the top of the travel list for Myanmar citizens seeking vacations, while efforts to attract Russian tourists to Myanmar have so far failed.

Both countries are locked out of international financial networks by sanctions and widely regarded as pariah states.

The junta is desperately attempting to alleviate a currency crisis that is worsening as international sanctions increase. It is considering joining the New Development Bank operated by Brazil, Russia, India, China and South Africa to help offset its isolation.

The junta is attempting to integrate Myanmar into the Russian payment system to maintain its foreign-exchange reserves and stabilize the Kyat, financial experts said last year when the idea was first proposed.

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