Redefining global finance: Emergence of alternative payment infrastructure

RBC: How did the global payment system work before, what has changed, and why?

Fradkov: I wouldn’t say that there was one thing before and now there’s another. We are still within the existing paradigm of the global payment system. However, we see the emergence of alternative opportunities.

Payments have become the most complicated topic in finance, a tool of “new warfare.” Financial Times states that the dollar is also a tool of this war. It serves as a soft power that is fundamentally important for controlling transactions and payments globally.

Walking away from the dollar in payments is correct, but it does not completely resolve the issue. share of the dollar in payments worldwide still fluctuates between 40% and 50%. At the same time, the significance of payments in national currencies is growing. According to the Central Bank, the share of the ruble in export earnings is expected to be above 53% by the end of 2025, while in import payments, it will be around 55%.


Even after shifting to other currencies, the dependence on the external framework will remain because there are foreign compliance and liquidity solutions that allow for precise control over payments between countries.

Many countries are attempting not only to switch to national currencies in payments but, importantly, to create their own payment infrastructure that would allow them to control their own trade flows in both bilateral payments and settlements with third countries.

In practice, such solutions are currently being developed in Russia, including within the framework of PSB projects and the A7 cross-border payment system.

RBC: Can such infrastructure be politically neutral if it is the country's own infrastructure?

Fradkov: Yes, it can. The world is moving away from the idea that there is one universal payment system through which everything must pass. A set of national, regional, and inter-regional solutions is forming. They will compete with each other just like banks, payment systems, logistics routes, and technological platforms.

RBC: How has Russia’s dependence on the international “politically non-neutral” payment system changed since 2022? The Chinese system in yuan is designed for China, after all.

Fradkov: The point is that Russia needs to create its own payment framework, domestic in origin but international in function. We have plenty of both technical solutions and financial capabilities. PSB, together with the A7 cross-border payment system, is developing one of these projects for a new payment architecture where payment does not depend on the approval of a third party.

RBC: How big is this market?

Fradkov: Estimates can be rather general. The flow of operations related to SWIFT infrastructure is estimated at about $150 trillion. Speaking of digital tools, according to Artemis Analytics, in 2025, the volume of operations with stablecoins is expected to reach $33 trillion, increasing by 72% year-on-year. Just for comparison: Visa's transaction volume for the same year is $16.7 trillion, and Mastercard’s is $10.6 trillion. This demonstrates that stablecoins have become a significant part of the global payment infrastructure.

I should clarify that stablecoins may be temporary. We shouldn’t regard them as a given and assume that this toolset will be used for decades.

RBC: According to BIS estimates, 98% of the value of all stablecoins is tied to the US dollar.

Fradkov: Even 99%, by some estimates. The total market capitalization is $312 billion, meaning more than $300 billion comprises various dollar-denominated stablecoins.

The most popular is USDT.

USDT is issued by a private company registered in one of the offshore territories, but this same company is one of the largest holders of U.S. Treasuries. So, the basic dependence on the dollar and the U.S. debt market hasn’t gone anywhere.

RBC: How is this control technically implemented, against which you are working?

Fradkov: It’s important to understand this. Without going into technological details — Tether Limited retains full control over the issued USDT and can block any tokens at its discretion, wherever they are held. Unfortunately, such precedents already exist.

Such mechanisms have already been applied. Tether has blocked funds not only from owners linked to illegal activities but also simply at the request of the U.S. administration. In recent years, significant assets belonging to holders from Iran and Russia have also been blocked.

RBC: Is tightening compliance a matter of time and situation?

Fradkov: It is the same compliance, just in a different technical format, in another shell. There should be no illusions here. Yes, technology has changed, but dependence remains.

Our pride is that we were the first to issue a stablecoin tied to the ruble through the A7 company, A7A5. This is a small piece of the global stablecoin market, but it is the largest non-dollar stablecoin. The turnover of A7A5 since its inception has reached nearly $140 billion.

It is also very important that we are not unique in this; many countries are following this path like Indonesia, Brazil, and others. They are actively developing their own solutions for alternative payments and issuing their own stablecoins tied to national assets.

It is precisely the settlements that are not tied to USDT that represent the segment of the market that will grow and may eventually become a real alternative to the established Western infrastructure.

RBC: If this is not about circumventing sanctions, is it an economically substantive business? Is it profitable?

Fradkov: If it weren't a profitable business, it would simply be a fool's errand. Financial sovereignty and, more broadly, technological sovereignty are state tasks. But even the most complex state task can encompass several sub-tasks: for example, circumventing sanctions can be included here. But in a broad sense, a state task must be economically viable.

RBC: What operations have already taken place?

Fradkov: We are working quite closely with many countries in Africa and Asia. For example, we have officially opened an A7 office in Nigeria, one of the largest African economies. This country has a population of almost 250 million people. In 15–20 years, it is forecasted to reach 400 million. Speaking about the population of the African continent as a whole, it is expected to grow to 2.5 billion by 2050. This is a huge market that also operates under restrictions. Many African countries still do not have central banks. And there are about a dozen such countries.

RBC: And your interests extend to countries without central banks?

Fradkov: It’s interesting for us, and it's interesting for these countries to have an alternative. We're not talking about abandoning classic principles in payments. It's a combination of both traditional solutions and modern ones that are actively evolving. I am not at all convinced that cryptocurrencies in payments, stablecoins, are the final entity.

RBC: You mentioned the Chinese payment system CIPS. Does A7 have any interaction with this platform? Or do you consider it a competitor?

Fradkov: This is where the strength of modern approaches lies: on one hand, we talk about competition, and on the other, the use of each other's opportunities. The beauty of having different systems is that the more players operate in this market, the more stable the system becomes.

RBC: Are they your competitor in Africa?

Fradkov: I wouldn’t say we’re in competition right now. Alternative payment methods are still not very tangible in terms of volumes. There’s an understanding that these tools need to be created. Competition will emerge at some point.

Recently, states have started competing not just through goods because a product must inherently be of high quality or comparable quality in terms of consumer characteristics. It doesn't matter whether it's an airplane or a turbine. Countries competed with their financing capabilities.

RBC: Is it more expensive for Russia or for the world in general?

Fradkov: In the world. If you look at standard payments, they can take days and involve significant commission fees. That’s a lot. The beneficiaries of this system are not the countries making the payment, but third countries that created this infrastructure and now use it also to justify the commercial component.

Returning to the question of the profitability of new payment systems, this is a completely standard, legal business in a good sense, which is being created as an alternative to classic banking.

RBC: How, when, and in what context did the idea to create A7 come about?

Fradkov: I won’t hide the fact that the trigger was the restrictions we faced in 2022. The financial restrictions turned out to be the most severe among all the imposed limitations, even when considering the logistical ones. We have long lived within this payment system and, in a way, continue to live under oligopolistic conditions, where literally a few players dictate prices and all other terms.

RBC: Is A7 killing the payment agent business?

Fradkov: A7 has its own infrastructure worldwide, a decentralised, distributed one that includes elements of both traditional banking and digital solutions, as well as everything related to having the appropriate brokerage, exchange, and so on.

RBC: It took a short time to create this infrastructure. Did it fundamentally already exist?

Fradkov: Its elements existed; we simply brought them together.

RBC: How does it work? How do you ensure liquidity in different currencies considering the declared geography?

Fradkov: If we talk about the legal framework of the entire process, then in reality no sanctions are being violated, because there is no such thing as a cross-border payment. It’s precisely that which has restrictions. There are distributed liquidity pools that exist worldwide in various currencies. If you take the jurisdiction of each individual country where we operate, then within that jurisdiction, this is absolutely normal, standard business that complies with all the regulations of that country.

RBC: You mentioned that the market of payment agents used gray schemes and didn’t pay taxes. How much have you paid in taxes?

Fradkov: We are the first agency company to operate in this sector at all. The first resident company from this sector. A company that has completely transparent reporting within the Russian framework. As a result, we have paid 25.5 billion rubles in taxes since we started operations.

RBC: What are the taxes based on?

Fradkov: On commission. That is our income. Our commission is 0.3% plus VAT. This is a well-known commission, and it’s fair without any markups.

RBC: How is it achieved?

Fradkov: This commission exists because we do not resell or buy services from someone else. This is very important. We control the entire chain, which allows us to manage costs.

RBC: Did you require huge investments to create this chain initially?

Fradkov: No, it was necessary to create a corresponding management system, basic approaches to our own compliance, risk management, a "know your customer" (KYC) system, and a decentralised management structure. A settlement company does not require any mega-infrastructure in terms of investment.

RBC: Have the investments already paid off?

Fradkov: I cannot say that the entire investment has paid off yet because the system is still developing. For us, the most important issue is access to liquidity. That's the most challenging part because liquidity is the key factor. And this business requires a liquidity management system. That is probably the main asset.

RBC: How do you solve this problem?

Fradkov: There are various tools for attracting liabilities, both from large businesses and private investors. We do not sell this as a public product. But it’s a standard investment mode.

RBC: In the A7 list, payments reach all of Europe. The last sanctions package from the European Union imposed sectoral sanctions against Russian cryptocurrency services with the expectation of mega-compliance from any European agents. Are there consequences for A7?

Fradkov: This has not affected our business at all. That's the short answer.

RBC: Is the current threat in the new EU package to extend such an approach to third countries also not frightening?

Fradkov: That's a complicated issue. The question of secondary sanctions is generally broader than A7's business. Let's assume that 90% of the world will be under sanctions, while 10% will not. What will happen then, I don’t know. I simply don’t understand how that would work. Theoretically, anything might be possible.

RBC: Counterparties in third countries, depending on where their interests lie, may start to choose what is preferable for them.

Fradkov: They may, but representatives from many countries are motivated not only by the fear of "violating". I put this word in quotes for some sanctions or falling under secondary sanctions; they are also motivated by the interests of their countries, businesses, and the possibility of conducting transactions, having systems that are alternatives to two or three existing ones.

This is a complex issue that the Global South is facing. Communicating with many partners, I can confidently say that it is indeed a pressing issue. This includes Africa, Latin America, and certain Asian countries. Each country has its own interests and tasks. Everyone has realised that the topic of payments is a bottleneck that can at any moment become a serious constraint for conducting trade transactions. This is a fact.

RBC: You mentioned that A7 continues to develop, that the market is changing and needs to change as well. Is legislation keeping pace with this development?

Fradkov: I wouldn’t link A7’s company with the development of legislation. A7 definitely does not want to and will not run ahead of the train, ahead of the legislation. That’s not our method. A7 operates within the legal framework of the countries where it works, including Russia. In terms of the market, legislation is moving forward. There’s no need for immediate solutions.

I believe we are moving in the right direction. Given the scale of our economy, this is being done gradually. The law on “Digital Currency and Digital Rights,” which was passed by the State Duma in the second and third readings, I view as an important step. This is progress. I support regulation for both agents and the crypto market.

RBC: Do you have plans related to this regulation? Or does it not affect you?

Fradkov: I cannot say that at all. I believe that our entire chain must work effectively, the combined payment pathway must be efficient and comfortable at every stage. Where it concerns Russian regulation, we must have the most advanced solutions within its framework. And this applies throughout the entire chain.

RBC: What share of this market can be expected with the system you are currently working on?

Fradkov: The only thing I haven’t thought about is this. I don't want to make a blind guess. Let’s refer to the numbers. The total capitalization of all stablecoins is estimated at around $312 billion. About 99% of that is linked to dollar-denominated instruments. Only 1% accounts for other currencies, and within that percentage, we are the largest with a capitalisation of A7A5 at about $570 million. Following us is the European stablecoin pegged to the euro, which is valued at $440 million. In third place are the Brazilians with a significant gap at $52 million.

If we don't linearly tie this to A7A5, which is just one of the products, then I think a target of 10% of the market is quite substantial. If such an ambitious goal is set, it would mean not just trading within Russia but using payment mechanisms in international trade.

RBC: And what is the timeline?

Fradkov: It depends on the resistance from those who currently hold 99% of the market.