Russia and China planning clearinghouse to avoid West – Moscow
Russia and China are working to set up a securities depository to rival Belgium-based Euroclear and Clearstream, Finance Minister Anton Siluanov has said.
In an interview with Izvestia published on Thursday, Siluanov said it is important to build “an independent payment infrastructure” in response to Western sanctions.
Russian investors previously held funds at European clearing houses through Russia’s National Settlement Depository (NSD). Euroclear and Clearstream stopped transactions with NSD and froze its accounts after sanctions were imposed against it in mid-2022, preventing investors from accessing their assets.
The Bank of Russia has estimated that around 5.7 trillion rubles ($66.8 billion) remains blocked.
Siluanov said the role of a new depository would be assumed by a planned Shanghai Cooperation Organization (SCO) Development Bank, which would enable Russians to invest in foreign assets and foreign investors to finance projects in Russia.
“We would like this bank – perhaps on its basis, or by itself – to create opportunities for our investors in our countries to freely buy and sell securities in any countries. In other words, to perform such an independent depository function,” the finance minister explained.
Analysts say the SCO bank could provide a real alternative to Western depositories, though challenges remain, including the high returns on ruble assets and the risk of asset freezes. Still, the SCO could allow seamless securities trading among member states that join the agreement.
Russian investors are also pursuing legal action at home. In August, the Moscow Arbitration Court accepted a lawsuit brought by a group of private investors against Belgium’s Treasury and Euroclear. The investors are seeking licenses from the Belgian authorities to unlock their assets, arguing that the actions of the Belgian Treasury and Euroclear are unlawful and discriminatory.
