The BRICS Alliance Considers Launching a Global Payments System
The global economic alliance known as BRICS is reportedly exploring the possibility of creating a global payments system that would bypass the traditional banking industry standard, SWIFT. The finance ministers of the BRICS countries are evaluating the feasibility of establishing a unified payments network and plan to discuss it further at their upcoming meeting next year.
Boosting Independent Payment Messaging Systems
Russian Finance Minister Anton Siluanov stated that the network would enhance the efforts of individual countries, such as Russia and China, to develop their own payment messaging systems. The objective is to discuss this matter among the financial authorities and agencies of BRICS member states.
Expansion and Future Outlook of BRICS
The decision to expand BRICS by including Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the UAE has set the stage for future growth. According to Siluanov, BRICS aims to distance itself from Western influence and strengthen ties within Southeast Asia, highlighting a trend that will persist in the future.
The Role of SWIFT and Potential Challenges
SWIFT plays a crucial role in the global banking system by facilitating secure money-related messages between banks. However, it banned several Russian banks in response to pressure from the European Union in March 2022. In August 2023, South Africa’s finance minister expressed that a BRICS-based payment system would aim to promote trade using local currencies rather than relying on the US dollar. He acknowledged implementation challenges and clarified that it would not directly challenge SWIFT.
Hot Take: BRICS Seeks Financial Independence from Western Influence
BRICS is considering the launch of its own global payments system as a means to assert financial independence from Western-dominated systems. By establishing a unified payments network, BRICS aims to strengthen its member countries’ individual efforts in developing payment messaging systems. This move reflects a growing trend within the alliance to distance itself from Western influences and forge stronger ties within Southeast Asia. While the implementation of a BRICS-based payment system may pose challenges, it signals a significant step towards reducing reliance on the US dollar and circumventing SWIFT.
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