Russia, a prominent member of the BRICS alliance, recently announced the development of a cutting-edge blockchain-based payment system. This system is poised to transform the way trade settlements are conducted among BRICS member nations, which include Brazil, Russia, India, China, and South Africa. The alliance aims to collaborate on harnessing blockchain technology and digital innovations to streamline transactions and enhance efficiency within the international monetary framework.
Kremlin aide Yury Ushakov unveiled this groundbreaking initiative, underscoring the importance of creating an independent BRICS payment system. He emphasized the need for a system that prioritizes convenience for governments, businesses, and the general population while remaining free from political influence and economically efficient. This aligns with the objectives outlined in the 2023 Johannesburg Declaration, which focuses on increasing settlements in national currencies and diversifying correspondent banking networks to bolster the security of international transactions.
Notably, the BRICS group has been actively pursuing de-dollarization and exploring alternatives to the U.S. dollar in international settlements. In addition to the new blockchain payment system, they are working on developing the Contingent Reserve Arrangement using currencies other than the U.S. dollar. Ushakov reiterated the commitment to utilizing different currencies in this arrangement, signaling a strategic shift away from traditional reliance on the U.S. dollar in global transactions.
The move towards a blockchain-based payment system by the BRICS alliance reflects a broader trend in the global financial landscape. Klaas Knot, Chair of the Financial Stability Board, recently highlighted the significance of crypto assets, tokenization, and artificial intelligence in maintaining global financial stability. By embracing these technologies, the BRICS alliance aims to enhance the efficiency and accessibility of the worldwide monetary system, positioning themselves at the forefront of financial innovation.