Moscow is set to push for an alternative global payment platform, aimed at reducing reliance on the US dollar, during the 16th BRICS summit in Kazan from October 22-24. The summit will bring together leaders from the expanded BRICS bloc—Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the UAE—along with new applicants like Thailand and Vietnam. This expansion has attracted the interest of 30 countries, 15 of which have formally applied to join.
Challenging the Dollar’s Dominance
The new payment system, outlined by Russia‘s finance ministry and central bank, would involve a network of commercial banks from BRICS countries, linked via their central banks. It would leverage blockchain technology to facilitate the transfer of digital tokens backed by national currencies, bypassing the US dollar for international transactions. The initiative is seen as a way to sidestep Western sanctions, which have posed challenges in trade settlements, even with allies like China, due to concerns over potential secondary sanctions from the United States.
Yaroslav Lissovolik, founder of BRICS+ Analytics, indicated that while the payment system is technically feasible, achieving consensus among the newly expanded bloc will be challenging.
Proposals Beyond Payments
In addition to the payment platform, Russia is advocating for the establishment of a “BRICS Clear” system for settling securities trade. It has also proposed setting up a BRICS grain trading exchange, supported by a pricing agency, to offer an alternative to Western-dominated agricultural commodity markets.
The Russian document critiqued existing global financial institutions, like the International Monetary Fund, for prioritizing Western interests. Russian Finance Minister Anton Siluanov has urged BRICS to develop an alternative to the IMF that better serves the evolving global economy.
Navigating Internal and External Challenges
Despite these ambitions, Russia faces challenges in garnering full support, as demonstrated by the absence of senior BRICS finance officials at a recent preparatory meeting. Nevertheless, the Kremlin expects leaders from all nine BRICS members and representatives from about 15 other countries to participate in the summit.
Kremlin aide Yuri Ushakov emphasized that BRICS is now an influential global structure, capable of reshaping the international financial landscape.
