RUSSIA is urging BRICS countriesto establish a new international payment system, immune to Western sanctions, at the upcoming summit in Kazan from October 22-24. President Vladimir Putin aims to strengthen BRICS—expanded to include Egypt, Ethiopia, Iran, and the UAE—as a global counterweight to Western dominance in trade and finance.
Alternative payment system proposal
Central to Russia’s proposal is a payment system that bypasses the US dollar. According to a document from Russia’s finance ministry, the system would connect BRICS central and commercial banks, using blockchain technology to transfer digital tokens backed by national currencies. This would allow secure, direct currency exchanges, bypassing potential sanctions-related issues.
Russia has faced growing difficulties in trade payments, even with friendly nations like China, as local banks fear secondary sanctions from the US The proposed system is seen as a way to overcome these challenges and reconfigure the global financial architecture.
Challenges and expansion of BRICS
While the proposal is technically feasible, its implementation will take time and consensus, according to Yaroslav Lissovolik of BRICS+ Analytics. Despite Russia’s push, only lower-level officials attended a preparatory meeting, suggesting Moscow may face challenges in gaining full support.
In addition to the payment system, Russia is proposing a ‘BRICS Clear’ platform for settling securities trade and a BRICS grain trading exchange, aiming to reduce reliance on Western bourses.
The summit will host leaders from all nine BRICS members and partners, alongside Saudi Arabia’s foreign minister, signalling growing interest in the bloc.
