BRICS revolutionizes the payment system with crypto and blockchain

BRICS will introduce a system of payment autonomous based on cryptocurrencies and blockchain technology.

In particular, the BRICS consortium is developing a blockchain-based transaction system as part of an annual objective to enhance the BRICS presence in the global trading landscape. international monetary system.

Let’s see all the details below.

Blockchain and crypto: the launch of the BRICS independent payment system

As anticipated, the BRICS countries, made up of Brazil, Russia, India, China and South Africawill engage in the creation of a payment system based on cryptocurrencies and blockchain, as reported by the Russian news agency TASS.

The Kremlin assistant, Yury Ushakov, said in an interview with TASS that the creation of an independent BRICS payment system is a crucial goal for the future.

Specifically focused on cutting-edge tools such as digital technologies and blockchain. The important thing is to ensure that the system is convenient for governments, citizens and businesses, cost-effective and immune to political interference.

This commitment is part of a specific plan for the current year, aimed at increasing the role of BRICS in the international monetary system.

For some time, the BRICS group has been trying to reduce its reliance on US dollars in settlements, a process known as de-dollarization.

Ushakov confirmed that work will continue to develop the Contingent Reserve Agreement, focusing on the use of currencies other than the US dollar.

Last week, a TASS report revealed that the Russian Ministry of Finance, the Bank of Russia and BRICS partners will collaborate on the creation of the payment platform multisided BRICS Bridge.

This with the aim of improving the global monetary system.

In the month of February, Glass Knot, President of the Financial Stability Board, wrote to the finance ministers of the Group of 20 (G20) countries highlighting that crypto assets, tokenization and artificial intelligence (AI) remain priorities in the context of the global financial system.

Russia: CBDC at the heart of BRICS relations

Russia recently stated that it is ready to use central bank digital currencies (CBDC) as a tool to simplify transactions between BRICS bloc countries.

In an interview with Sputnik, the Russian Finance Minister, Anton Siluanov, announced that Russia, as president of the bloc, will promote a system to address the current fragmentation of the “financial, settlement and payment system.”

Siluanov proposed the creation of a platform connecting the financial systems of participants, noting that technological gateways for central bank digital currency settlements are already operational.

This system, called the “BRICS bridge”, aims to ensure a fair level of equality and promote the development of trade relations between BRICS countries and friendly nations.

The finance minister indicated that the bloc is willing to test the system with countries interested in linking their financial systems to those of the BRICS.

Also mentioning the possibility of collaborations with Chinesethe neighbors ofEurasian Economic Union and the Persian Gulf Countries.

Although Russia is currently testing the digital ruble as a CBDC, with the participation of 30 domestic financial institutions until the end of this year, Siluanov did not specifically mention the use of the digital ruble in this proposed new system.

China, on the other hand, has already launched the digital yuan and is exploring its potential for international settlements through Mbridge.

That is, an initiative aimed at connecting the economies of China, Hong Kong, Thailand and the United Arab Emirates with a common CBDC payment circuit.

Russia and China explore Yuan for international lending

The main BRICS players, Russia and China, are seriously considering the option of reducing the use of the US dollar in international lending. In particular, they choose to target the Chinese yuan as new reference currency.

Russian Finance Minister Anton Siluanov is implicitly hinting at a possible transition from the US dollar team to the yuan team.

The BRICS team is concerned about the dominance of the US dollar and is trying to involve other countries in a plan to strengthen their currencies.

Russia is ready to accept yuan loans, but awaits the green light from China. If this approval comes, it will score a significant turning pointwith billions of dollars not following the usual trajectory in global financial markets.

The BRICS’ goal is to test the US dollar by valuing the yuan and other local currencies.

However, it should be emphasized that nothing is definitive yet. Siluanov said that despite years of discussions with China, so far there have been no concrete opportunities.

In the bigger picture, BRICS aims to finally free itself from dependence on the US dollar. The idea of ​​creating its own currency, similar to the euro, is emerging.

Siluanov believes that this may be one Valid alternative to the US dollar, allowing BRICS countries to set prices and parameters without having to depend on the dollar or its central bank.

Currently, these are just rumors. The BRICS group plans to delve deeper into the issue at its next summit in October, trying to come up with solid plans that can shake up the current financial status quo.

If they get what they want and the world begins to detach from the US dollar, it will be the US economy that will suffer the most, potentially resulting in a free fall of US financial dominance on a global scale.