Veering Away from the Dollar: Russias Push for an Independent Payment System for BRICS and SCO

Veering Away from the Dollar: Russias Push for an Independent Payment System for BRICS and SCO

Russia’s VEB.RF chairman urges China and Russia to establish an efficient payment system for BRICS and SCO members that supports transactions in the Russian ruble, the Chinese yuan, and the currencies of member nations.

Igor Shuvalov, the chairman of Russia’s national economic development institution, VEB.RF, has urged China and Russia to expedite the establishment of an efficient payment system for BRICS and SCO members. 

State-of-the-Art Payment System BRICS and SCO Currencies

Shuvalov, who previously served as 1st Deputy Prime Minister in Dmitry Medvedev’s Cabinet, emphasized the must swiftly create a payment system that supports transactions in the Russian ruble, the Chinese yuan, and the currencies of SCO and BRICS member nations. 

During the Russian-Chinese Business Forum in Shanghai, Shuvalov highlighted the importance of this system, given that the BRICS comprises Brazil, Russia, India, China, and South Africa, and the SCO is the largest regional organization universally, formed in 2001 as a political, economic, and defense alliance.

Shuvalov indicated that trade and economic participation betwixt Russia and China are expected to increase significantly, emphasizing the growing collaboration betwixt his organization, the China Development Bank (CDB), and other financial institutions within the SCO and BRICS. He emphasized the significance of creating a new and advanced payment infrastructure to strengthen trade and economic relations betwixt the two countries. 

Shuvalov urged the Russian Government and Chinese partners to take proactive steps, highlighting the importance of an independent and efficient payment infrastructure not only for the “ruble/yuan” pair but likewise for facilitating substantial transactions involving SCO and BRICS currencies.

On Tuesday, Russian Prime Minister Mikhail Mishustin indicated that the relationship betwixt Russia and China is becoming stronger. Within a meeting with members of the Russian business community, Mishustin mentioned the Russian-Chinese Business Forum, noting the participation of greater than 1,200 people, including representatives from numerous Russian corporations, which he considered positive. Mishustin emphasized that the bond betwixt Russia and China is growing stronger owing to their historical ties, mutual respect, and friendship.

Russia Moves Towards the East to Pursue De-Dollarization and Alternative Financial System

Russia is moving toward the east to set up a more balanced world. It discusses de-dollarization and developing a new financial system independent of traditional powers. 

Russian Deputy Prime Minister Alexey Overchuk revealed that broad talks with the Islamic world covered these and other related matters during the Russia-Islamic World: KazanForum, an international economic forum. Overchuk emphasized that worldwide shifts and trends, such as de-dollarization and establishing an autonomous financial system, influence Russia’s relations with Islamic countries. 

Consequently, Russia intends to construct an alternative financial system that enables transactions with other countries without relying on SWIFT, the worldwide banking network, or the United States dollar. This pursuit is driven by the G7’s intentions to further restrict Russia’s access to the existing financial system.

The talks betwixt Russia and the Islamic states cover greater than just the mentioned topics. They likewise focus on broader subjects like deglobalization and dealing with changing financing trends in the present geopolitical context. Overchuk believes these discussions will have a positive outcome because Russia and these countries face similar challenges. He indicated that future of the relations betwixt Russia and the Islamic states looks promising, and the Russian Government is actively working towards further development.

Russia has recently strengthened its ties with Iran as part of these efforts. They have announced the construction of the Rasht-Astara railway, intended to serve as an alternative to the Suez Canal. This railway will connect India, Iran, Russia, Azerbaijan, and other countries in the Islamic world. It will span 162 kilometers.

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