The BRICS group of emerging economies, consisting of Brazil, Russia, India, China, and South Africa, has announced plans to establish a payment system based on blockchain and digital technologies. This move aligns with BRICS’ broader objective of reducing reliance on Western currencies and financial mechanisms.
Yury Ushakov, a senior foreign policy aide to Russian President Vladimir Putin, shared details of the plan in an interview with TASS, emphasising that the envisioned system would operate independently of political considerations and national fiat currencies.
Ushakov stated, “We believe that an important goal for the future is the creation of an independent settlement payment system within the BRICS framework that would be based on the most modern technologies, such as digital currencies and blockchain.” He added that the system aims to be user-friendly for states, individuals, and businesses while incurring minimal costs.
However, specific details and a timeline for the development still needed to be provided.
In 2024, BRICS intends to enhance its role in the international monetary and financial systems. Ushakov highlighted Russia’s commitment to promoting alternative currencies to the US dollar within the BRICS Contingent Reserve Arrangement (CRA). The CRA serves as a shared reserve of currencies among BRICS members to facilitate smooth trade during liquidity crises or sanctions.
BRICS witnessed significant expansion earlier in the year, including Saudi Arabia, Iran, Ethiopia, Egypt, and the United Arab Emirates in January. Over the past year, BRICS nations have increasingly shifted away from using the dollar and euro for settlements within the bloc, opting for national currencies. Russia, in particular, has accelerated this shift, with 85% of its settlements with BRICS countries conducted in national currencies by the end of 2023, compared to 26% two years prior. The move comes amid challenges related to Western sanctions, particularly those affecting Russia’s use of SWIFT for cross-border transactions.
