BRICS to Develop Digital Currencies and Blockchain-Based Payment System

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Hongji Feng

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Hongji Feng

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Hongji is a crypto and tech reporter. He graduated from Northwestern University's Medill School of Journalism with a Bachelor's and a Master's. He has previously interned at HTX (Huobi Global),...

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March 5, 2024 03:57 EST

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BRICS nations are set to create an independent blockchain-based payment system, incorporating digital currencies to enable smoother and cost-effective global transactions.

The announcement, made by Kremlin aide Yury Ushakov in an interview with the Russian News Agency TASS, highlighted the coalition’s objective to enhance financial autonomy from the US dollar through cutting-edge digital and blockchain technologies.

Blockchain-Based Payment System

“We believe that creating an independent BRICS payment system is an important goal for the future,” said Ushakov. “Which would be based on state-of-the-art tools such as digital technologies and blockchain.”

“The main thing is to make sure it is convenient for governments, common people and businesses, as well as cost-effective and free of politics,” said Ushakov.

Ushakov emphasized that a key objective for the year is enhancing BRICS’s impact on the global financial and monetary systems. In the 2023 Johannesburg Declaration, BRICS leaders agreed on the importance of expanding the use of national currencies for settlements.

The 2023 Johannesburg Declaration detailed that “We recognise the widespread benefits of fast, inexpensive, transparent, safe, and inclusive payment systems.” It underscored the commitment of BRICS nations to improve cross-border payments by mapping the G20 Roadmap on Cross-border Payments.

Additionally, the declaration emphasized the sharing of experiences and practices among BRICS members concerning payment infrastructures.

The Declaration also advocated for “encouraging the use of local currencies in international trade and financial transactions between BRICS as well as their trading partners.”

BRICS to Reduce Dependence on USD

According to Ushakov, the payment system has a major goal to decrease the BRICS nations’ dependence on the US dollar.

“Work will continue to develop the Contingent Reserve Arrangement, primarily regarding the use of currencies different from the US dollar,” said the Kremlin aide.

BRICS was initially founded by Brazil, Russia, India, and China, with South Africa, Egypt, Ethiopia, Iran, and United Arab Emirates joining the organization.

Although some sources including Bloomberg and BBC confirmed that Saudi Arabia has also accepted the invitation, a Reuters report argued otherwise and claimed the country was still considering the offer.