Russia, a member of the BRICS alliance, announced the development of a new blockchain-based payment system to revolutionize trade settlements.
The system is set to become an independent mechanism for conducting transactions among BRICS member nations.
Blockchain-Based Payment System Plans
The BRICS alliance, consisting of Brazil, Russia, India, China, and South Africa, plans to collaborate on developing a payment system utilizing blockchain technology and digital innovations. This development is part of a broader strategy to amplify BRICS’ influence within the international monetary framework.
Kremlin aide Yury Ushakov made the announcement on Tuesday in an interview with TASS, a Russian news agency. Ushakov emphasized the significance of this initiative, stating, “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.”
Emphasizing the importance of this endeavor, Ushakov highlighted the need for a system that is not only convenient for governments, businesses, and the general population but also free of political influence and economically efficient.
He further highlighted the objectives outlined in the 2023 Johannesburg Declaration, which emphasized increasing settlements in national currencies and diversifying correspondent banking networks to ensure the security of international transactions. However, Ushakov did not reveal a timeline for the launch of the new BRICS blockchain payment system.
BRICS Takes a Step Towards De-Dollarization
The BRICS group has also been actively working toward de-dollarization, seeking alternatives to the U.S. dollar in international settlements. Their efforts extend beyond the payment system as they continue to develop the Contingent Reserve Arrangement using currencies other than the U.S. dollar.
Ushakov emphasized, “Work will continue to develop the Contingent Reserve Arrangement, primarily regarding the use of currencies different from the US dollar.”
The move towards a blockchain-based payment system aligns with the global financial trends. Klaas Knot, Chair of the Financial Stability Board, recently emphasized in a letter to G20 finance ministers that crypto assets, tokenization, and artificial intelligence are among the top priorities for maintaining global financial stability.
A recent report from TASS also shows that the Russian Finance Ministry, in collaboration with the Bank of Russia and other BRICS partners, is actively working on developing the “BRICS Bridge” multisided payment platform. This platform aims to enhance the effectiveness and accessibility of the worldwide monetary system.
