Crypto Takes Center Stage at BRICS Summit Amid De-Dollarization Efforts

Key Takeaways

• BRICS Nations are exploring cryptocurrency as an alternative to the U.S. dollar.
• Russia is actively working to bypass Western-dominated payment systems. 
• The m-Bridge initiative offers a promising avenue for further de-dollarization. 

As the BRICS summit convenes in Kazan, crypto has emerged as a key topic of discussion among member nations, alongside other strategies aimed at reducing reliance on the U.S. dollar.

This push comes as the coalition seeks to counter the dominance of Western financial systems and the impact of economic sanctions on Russia.

Crypto at BRICS Summit

BRICS lawmakers are pushing the sale of Russian-mined Bitcoin to international buyers, positioning crypto as a viable alternative to traditional financial systems dominated by the U.S. dollar.

Additionally, Russia is developing a settlement and payment infrastructure to bypass Western-dominated payment systems, a key de-dollarization initiative expected to emerge from the summit.

The country’s leading mining firm, BitRiver, and the Russian Direct Investment Fund (RDIF) have partnered to establish a parallel BRICS-wide mining initiative.

The initiative aims to create crypto and AI data centers across member nations and reduce reliance on Western technology.

m-Bridge: A Promising Avenue for De-Dollarization

Despite positive momentum in de-dollarization efforts, BRICS countries still show a higher level of dollarization compared to the global average of around 47% for cross-border lending and international debt securities.

As a result, Russia is taking the lead with its m-Bridge.

Introduced at the BRICS summit, the initiative utilizes central bank digital currencies (CBDCs) for cross-border payments and has emerged as a potential game-changer.

By minimizing reliance on the dollar through direct currency transactions, m-Bridge could significantly reduce the U.S. dollar’s dominance in global payments.

According to ING analysts , “Over the last four years, the share of BRICS foreign exchange in cross-border bank claims has increased to 15%, while other emerging market currencies have risen to 19%.”

“If core BRICS Nations fully transitioned to non-dollar transactions, it could significantly affect around $2 trillion of the global $18.4 trillion in dollar-denominated cross-border bank claims and about $0.6 trillion of the $13.6 trillion in dollar-denominated international debt securities,” the analysts added.

If successful, m-Bridge could significantly reduce the U.S. dollar’s dominance in global payments.

The initiative has garnered interest from over thirty central banks, but its implementation faces organizational and governance challenges.