In October, Russian President Vladimir Putin confirmed that the BRICS nations are in discussions about using digital currencies to reduce Western influence on fintech. Currently, the group is considering the creation of a digital assets platform aimed at reducing reliance on US dollars for international transactions. President Putin has expressed support for this initiative, highlighting that digital currencies could benefit not only the BRICS countries but also other developing economies.
According to Putin, the BRICS nations are planning to launch a service tentatively called BRICS Pay, as reported by Crypto Briefing. This platform will be used by member countries, including Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates.
Built on a blockchain network, the platform is expected to facilitate cross-border settlements for the above-mentioned nations. Financial assets such as cryptocurrencies and CBDCs will enable transactions without the need for brokers or intermediaries. Additionally, using digital assets for payments can reduce service fees typically charged by payment facilitators for fiat currency transactions.
To support these payments in digital currencies, the BRICS nations are also looking to launch a messaging system like SWIFT – which is a secure platform for information sharing that is used by several financial institutions.
The BRICS group has been attempting to bring de-dollarisation into effect since earlier this year. In March this year, Russian publication TASS reported that the creation of a potentially decentralised platform has been proposed to the group to integrate digital assets into the existing financial systems of the involved economies.
In recent years, the US dollar has faced significant volatility due to consecutive interest rate hikes in the post-COVID-19 era. For China and Russia, the need to reduce reliance on the dollar is particularly pressing, as the US has imposed multiple sanctions on payments originating from these countries.
The 16th BRICS Summit was held in Kazan, Russia between October 22 and October 24. The issue of navigating the current international payment systems, which the BRICS view as being dominated by the dollar, was reportedly one of the top agendas during the meeting.
It is worth noting that India is also collaborating with G20 nations to develop a comprehensive set of global crypto regulations. However, the RBI and officials from India’s Ministry of Finance have yet to disclose any details about the digital assets platform currently under discussion by the BRICS group.