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BRICS to Create Blockchain-Based Payment System To Reduce Dollar Reliance

Last Updated March 5, 2024 7:38 PM
Eddie Mitchell
Last Updated March 5, 2024 7:38 PM
Key Takeaways
  • BRICS announces plans to use blockchain and digital assets for a new international payment system.
  • The move comes as part of BRICS’ ambitions to boost their role and presence in the global economy.
  • It aims to be “cost-effective”, “convenient”, and “free of politics” for all users.

A Russian aide to the Kremlin has revealed  that the intergovernmental BRICS group is creating a blockchain-based payment system for settling international trade.

Though there are no exact specification details on the project as of yet, this could represent a major step forward for BRICS as it works to de-dollarize and gain a foothold in the international markets.

Blockchain and BRICS

The newly formed BRICS, which is seeking to become an international trading and economic bloc comparable to the likes of the European Union, is setting out to create an independent payment system using blockchain and digital assets.

In an interview  with Russian news agency, TASS, Kremlin aide Yury Ushakov said:

“We believe that creating an independent BRICS payment system is an important goal for the future, which would be based on state-of-the-art tools such as digital technologies and blockchain. The main thing is to make sure it is convenient for governments, common people and businesses, as well as cost-effective and free of politics,”

According to Ushakov, increasing the role of BRICS in the international and monetary system is the focus of 2024. As part of this bid, BRICS fiscal policy aims to reduce its reliance on U.S. dollars for international settlements.

“Work will continue to develop the Contingent Reserve Arrangement, primarily regarding the use of currencies different from the US dollar,” said Uashakov.

Since 2019 , talks of a digital currency that can achieve this have been taking place, and it appears these discussions are now coming to fruition.

BRICS Bridge?

The news comes shortly after BRICS finance ministers and central bank governors met at the end of February 2024 in Sao Paulo, Brazil, to discuss the state of the international financial system and the creation of an alternative payment and settlement initiative dubbed “BRICS Bridge”.

As reported by  English-speaking Russian media outlet, Sputnik International, Russian Finance Minister Anton Siluanov said “a BRICS Bridge” had been proposed and that Russia was “ready to start [testing]” with countries such as China, or members of the Eurasian Economic Union (EAEU) as well as other Gulf countries.

Siluanov highlights that the BRICS Bridge system is designed to operate as a multilateral digital settlement platform.

Blockchain Goes Global

Though this latest announcement has no mention of the “BRICS Bridge”, it does come as Russia explores numerous other options with BRICS nations, including the potential of central bank digital currencies (CBDCs), stablecoins, local fiat, and other forms of digital currencies.

As TASS reported , the Russian Finance Ministry and Bank of Russia, alongside BRICS members, will have a draft report on numerous initiatives for improving the international monetary system, and the BRICS Bridge may be included in this report.

Seemingly, the strengthening of financial tracks and frictionless economic cooperation between BRICS members is a major imperative for the group, and interestingly blockchain happens to be at the center of it.

The quest for greater economic presence in the face of rapid technological innovation is also felt amongst G20 members who have also recently outlined crypto and tokenization as key areas of focus  for for managing financial stability, risk, and other areas of need in 2024.

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