Iran and Russia connected their national payment systems on Monday, marking a significant step towards bypassing the U.S. dollar in their bilateral transactions.

The linkage between Russia’s Mir and Iran’s Shetab payment systems was launched at a ceremony attended by Central Bank of Iran (CBI) Governor Mohammad-Reza Farzin and Iran's Ambassador to Moscow, Kazem Jalali. This first phase allows Iranian citizens to withdraw cash in rubles from Russian ATMs using their bank cards, with plans to expand the service to Russian citizens in Iran during a second phase. The final phase will enable Iranians to make purchases directly in Russian stores via point-of-sale devices.

“Today, we take a big step towards de-dollarization and the facilitation of economic relations between Iran and Russia,” said Farzin, as reported by the semi-official Fars news agency.

Currently, four Iranian banks are providing this service, with additional banks expected to join as the system expands.

Both Iran and Russia, facing U.S. sanctions, have intensified their political and economic cooperation, particularly in the banking sector, to counter American restrictions. In December of last year, Farzin met with his Russian counterpart, Elvira Nabiullina, to finalize an agreement enabling trade between the two nations in their respective currencies rather than the U.S. dollar. (ILKHA)