BRICS Nations to Create Independent Blockchain-Based Payment System
BRICS nations, consisting of Brazil, Russia, India, China, and South Africa, are planning to establish an independent blockchain-based payment system that incorporates digital currencies. The goal of this initiative is to enhance financial autonomy from the US dollar by leveraging cutting-edge digital technologies and blockchain.
Objective of the BRICS Payment System
The BRICS coalition aims to create a convenient, cost-effective, and politics-free payment system that benefits governments, businesses, and common people. By developing this system, BRICS nations seek to expand their influence on the global financial and monetary systems.
Enhancing Cross-Border Payments
In the 2023 Johannesburg Declaration, BRICS leaders recognized the benefits of fast, inexpensive, transparent, safe, and inclusive payment systems. They emphasized the importance of using national currencies for settlements and improving cross-border payments by following the G20 Roadmap on Cross-border Payments. The declaration also highlighted the significance of sharing experiences and practices related to payment infrastructures among BRICS members.
Promoting Use of Local Currencies
The Declaration encouraged the use of local currencies in international trade and financial transactions between BRICS nations and their trading partners. This move aims to reduce dependence on the US dollar.
BRICS Nations’ Efforts to Reduce Dependence on USD
Kremlin aide Yury Ushakov stated that one of the main goals of the proposed payment system is to decrease BRICS nations’ reliance on the US dollar. He mentioned that work will continue to develop the Contingent Reserve Arrangement with a focus on using currencies other than the US dollar.
Expansion of BRICS Membership
In addition to the founding members (Brazil, Russia, India, and China) and South Africa, other countries such as Egypt, Ethiopia, Iran, and the United Arab Emirates have joined BRICS. While sources like Bloomberg and BBC confirmed Saudi Arabia’s acceptance of the invitation to join BRICS, a Reuters report claimed that the country was still considering the offer.
Hot Take: BRICS Paving the Way for Global Financial Transformation
The creation of an independent blockchain-based payment system by BRICS nations marks a significant step towards achieving financial autonomy and reducing reliance on the US dollar. By incorporating digital currencies and leveraging cutting-edge technologies like blockchain, BRICS aims to enhance cross-border payments, promote the use of local currencies in international trade, and develop a convenient and cost-effective payment system for governments, businesses, and individuals.
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