The new BRICS payment system, primarily initiated by China and Russia, also known as “BRICS Pay,” is a planned independent and decentralized payment messaging system for BRICS countries to trade with each other in their own currencies, independent of the US dollar. The Russian and Chinese finance ministries and their central banks, in cooperation with BRICS partners, are preparing a report for BRICS leaders on a project “to improve the international monetary and financial system,” which will include a list of initiatives and recommendations regarding the project. The outcome of the report could be the creation of a multilateral digital payment and settlement platform, which would help bring together the financial markets of BRICS member states and increase the volume of trade between them. In this case, the central bank digital currencies of the BRICS countries could be used, with their price pegged to the value of national currencies. Keeping in mind that “the digital settlement and payment platform will be decentralized, with no participant being able to restrict the actions of others,” the proposal should be approved by Russia and China. If the initiative proposed by Russia and China is approved, the BRICS countries will be asked to coordinate legislative work on it. Work is still underway on the idea of moving toward a single currency that can be used across BRICS countries, and there is also a trend toward using more national currencies, including digital currencies, such as the digital Russian ruble and the digital Chinese yuan.
This was confirmed by Russian Deputy Foreign Minister “Sergei Ryabkov” in an interview with the Serbian newspaper Politika on Tuesday, October 22, 2024, when he said, “Major developments are expected regarding mutual payment mechanisms in the BRICS countries after the summit in Kazan.” Ryabkov added—in the interview published by the Russian Foreign Ministry on its official website—that “I believe that everyone will see significant developments in this area at the conclusion of the summit in Kazan. As our Chinese friends say, a journey of a thousand miles begins with one small step. I believe we will take a not-so-small first step.” Ryabkov added in the interview published by the Russian Foreign Ministry on its official website. He continued, “But we should not expect a huge leap forward. This process is likely to be an evolving one because the BRICS group operates on the basis of consensu”s. The Russian diplomat noted that “there is still a long way to go to gradually transition from payments in national currencies to the creation of a single BRICS currency.”
Here, the BRICS countries are planning to launch a digital asset platform for cross-border settlements and create a new BRICS currency, or support any other currency to replace the US dollar, as a move that appears to have angered US President-elect “Donald Trump.” For this reason, President “Trump” warned BRICS countries, including India, to prepare for a 100% increase in tariffs if they continue their efforts to reduce the role of the US dollar in the global economy. With Trump stating that “if the BRICS countries go ahead with their plans to reduce their dependence on the US dollar, they will lose the opportunity to sell any of their assets to the United States.”
It’s worth noting that this warning from US President “Trump” comes just days after the “Russian Senate” approved a bill defining the tax framework for crypto assets, a step toward legalizing cryptocurrencies in the country. However, there has been no response from Putin, Indian Prime Minister Narendra Modi, or Chinese President Xi Jinping to President Trump’s warning so far. Pressures have also increased on both China and Russia to reduce their reliance on the US dollar after the United States imposed multiple sanctions on them. Concerns in China about Chinese national security related to the US technology war were a major factor, while the ongoing war between Russia and Ukraine led to sanctions imposed not only by the United States but also by other countries on Russia and its economy.
Since March 2024, the BRICS group has begun planning a digital payment network powered by cryptocurrencies. The platform, tentatively called BRICS Pay, is expected to facilitate cross-border settlements for the aforementioned countries using digital assets such as cryptocurrencies and central bank digital currencies. The BRICS countries also plan to launch this internal payment system alongside a secure messaging platform, similar to the “SWIFT system” currently used by international banks to facilitate internal communications. The timeline for this platform’s launch remains uncertain.
Since last year, 2024, the BRICS payment system (BRICS Pay) has garnered much attention. However, former U.S. President “Trump” threatened to impose a 100% tariff if BRICS countries move away from the dollar. There are many future importance of the BRICS payment system; this vision is realized through the moving of the BRICS toward a non-dollar payment system. BRICS is moving toward expanding non-dollar payments as the group’s countries seek to move away from the US-controlled SWIFT banking messaging system. The group’s plans, which include Russia, China, Brazil, South Africa, India, Saudi Arabia, the UAE, Egypt, and Ethiopia, include creating an international payment system, BRICS Pay, based on “blockchain technology,” that is, on digital assets.
Russia allows the use of digital assets in international payments. As it will be possible to bypass Western sanctions and obstacles thanks to this decentralized mechanism, which will include multiple currencies. The mechanism will contribute to strengthening the economic influence of the BRICS group and accelerating the emergence of a supranational currency, which is a direct threat to the status of the US currency.
One of the main goals of the BRICS countries is to move away from the dollar and use national currencies in trade transactions. It is worth noting that 95% of trade transactions between Russia and China are carried out in rubles and yuan. All of this enhances the ability to pay and strengthens economic stability in the face of ambiguity, uncertainty, and external shocks.
The idea of the mechanism revolves around creating a special platform based on digital currencies in the BRICS countries to implement financial settlements, which will break the monopoly of the Western SWIFT system for financial operations around the world. The BRICS countries’ intention to create a payment system based on digital currency technology.
In light of the United States’ use of the dollar as a tool in sanctions and the US public debt reaching an astronomical level, countries in the world, led by the BRICS countries, are working to increase the use of national currencies in international trade.
Accordingly, all BRICS countries and their partners in the developing Global South look forward to a leading role for BRICS in advancing innovative solutions to the debt crisis and the economic pressures posed by the US and the West, through the International Monetary Fund and other Western financial institutions. This can be achieved by developing a new, innovative digital payment mechanism, with support from China and Russia, primarily through BRICS.
