BRICS Nations to Develop Blockchain-Based International Payment System

March 7, 2024

By Sharan Kaur Phillora

The BRICS coalition, comprising Brazil, Russia, India, China, and South Africa, is set to create a novel payment system leveraging blockchain and digital currencies as per their announcement on the platform X. This initiative aims to enhance the bloc’s autonomy in the global financial landscape, particularly in reducing reliance on conventional currencies like the U.S. dollar.

Here’s what we know:

Kremlin aide Yury Ushakov detailed the ambitious plan in a statement, emphasizing the system’s focus on accessibility, cost-efficiency, and political neutrality. “We believe that creating an independent BRICS payment system is an important goal for the future, which would be based on state-of-the-art tools such as digital technologies and blockchain,” Ushakov remarked. He stressed the importance of designing a platform that caters to the needs of governments, the general populace, and businesses alike.

This initiative is part of BRICS’s broader strategy to diminish its dependency on the U.S. dollar in international settlements, a process often referred to as de-dollarization. The group’s efforts include the development of the Contingent Reserve Arrangement, emphasizing transactions in non-U.S. dollar currencies.

Recent reports suggest that the finance ministries and central banks of BRICS countries, in collaboration with Russia, are working diligently on the “BRICS Bridge” multisided payment platform. This platform is expected to significantly contribute to reforming the global monetary system, fostering closer financial integration among BRICS nations and boosting mutual trade.

The move comes amid increasing discussions among global financial leaders about the role of digital assets, tokenization, and blockchain in reshaping the international monetary landscape. The Financial Stability Board, monitoring the global financial system, has identified these areas as priorities for the G20 nations, reflecting a widespread recognition of the transformative potential of digital technologies.

As the BRICS nations continue to navigate the complexities of international finance, their pivot towards blockchain and digital currencies marks a significant step toward redefining economic cooperation and competition in the digital age. The development of an independent, blockchain-based payment system signifies a concerted effort to foster a more inclusive and equitable global financial ecosystem.

About the author

Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.

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