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A BRICS spokesman stated that using the dollar incurs additional costs.
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All member countries are open to utilizing cryptocurrencies.
As the BRICS group (Brazil, Russia, India, and South Africa) develops its own payment system, the reliance on the dollar for international trade is diminishing.
Vice President of the Chamber of Commerce and Industry of the BRICS inter-state association, Samip Shastri, mentioned that the volume of transactions in the national currencies of the member countries has already surpassed the volume of transactions in dollars.
“Countries are very pleased to conduct trade using their own currencies,” noted the official, emphasizing that the use of the dollar incurs additional costs which are avoided when payments are made directly in rubles, rupees, or other local currencies.
Shastri made these remarks at the BRICS Urban Future Forum “Cloud City” held in Russia on September 19. He also explained that discussions regarding the use of cryptocurrencies in cross-border payments are ongoing while waiting for the development and official launch of the group’s own system.
These statements from the BRICS official are related to comments made two weeks prior by Dmitri Volvach, Deputy Minister of Economic Development of Russia, who emphasized the progress in the de-dollarization process being undertaken by the Shanghai Cooperation Organization (SCO).
According to Volvach, 92% of cross-border payments made by this association of 26 Eurasian countries – which includes China, Russia, and Iran (all part of the BRICS group) – are already being conducted without the use of dollars.
This target has been established since the group’s annual summit held last year in Africa, which initiated various international payment projects including the use of national currencies and cryptocurrencies.
This emphasis on non-dollar payments has been consistently highlighted by BRICS foreign ministers and will be a central focus of the meeting planned for October in Russia.
The bloc, initially established by Brazil, Russia, India, China, and South Africa, has clearly stated its intention to liberate the world from the dollar.
In response to sanctions imposed by the West on Russia, which limit access to the global payment infrastructure, creating an alternative payment system has become a key objective for not only Russia but also for nations that continue to engage in trade with the country.
Russian Foreign Minister Sergey Lavrov mentioned that an increasing number of countries are expressing interest in the payment platforms being developed by the economic bloc as alternatives to Western payment systems.
“Many are interested in the payment platforms being created within BRICS that facilitate trade, investment, and other economic activities, independent of those who have chosen to weaponize the dollar and the euro,” he stated.
He referred to a group of 34 countries that, according to Russian President Vladimir Putin, have shown interest in joining the de-dollarization effort and will be attending the Summit.
As reported by CriptoNoticias, several payment tools will likely be presented at the annual BRICS meeting.
One such tool is SPFS, a Russian messaging system that would be integrated into the supranational payment platform BRICS Bridge. Additionally, a stablecoin is also proposed: the gold-backed Common Account Unit (Unit). The digital payments platform BRICS Pay, launched by the group in 2018, is also included.
Key Facts on BRICS and Currency Trends
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Using the dollar entails additional costs, a BRICS spokesman said.
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All countries in the bloc are willing to use cryptocurrencies.
The De-Dollarization Movement Among BRICS Nations
The nations comprising the BRICS group—Brazil, Russia, India, China, and South Africa—are increasingly moving away from the use of the US dollar in international trade. Recent developments indicate that the volume of transactions in national currencies among these member countries has already surpassed that of dollar-denominated transactions.
According to Samip Shastri, Vice President of the Chamber of Commerce and Industry of the interstate association of BRICS, nations are keen to engage in trade using their local currencies. This new trend reflects a growing dissatisfaction with the American currency, which Shastri highlighted entails additional costs. These costs are avoided when dealing directly in local currencies such as rubles and rupees.
Shastri’s comments were made during the BRICS Urban Future Forum “Cloud City” in Russia on September 19. He further elaborated on ongoing discussions regarding the use of cryptocurrencies in cross-border payments as the bloc anticipates the launch of its own payment system.
Current Trends: De-Dollarization in Action
Recently, Dmitri Volvach, Deputy Minister of Economic Development of Russia, echoed Shastri’s sentiments. He pointed out significant strides in the de-dollarization process observed within the Shanghai Cooperation Organization (SCO). Notably, 92% of cross-border payments among SCO’s 26 member countries are conducted without the use of the US dollar.
Global Economic Shift: The Rise of Non-Dollar Payments
The declining reliance on the US dollar is a goal established by the BRICS group, reaffirmed during the annual summit in Africa. The focus is on developing alternative tools for international transactions, which include:
- Utilizing national currencies for trade.
- Exploring cryptocurrencies as a viable payment method.
Implications of De-Dollarization
The shift away from dollar dependency has broad implications for global trade dynamics. As the Western sanctions intensify against Russia, the development of alternative payment platforms has gained urgency among BRICS members. Sergey Lavrov, Russia’s Foreign Minister, commented on the increasing interest from various nations in alternative payment platforms being constructed within BRICS, designed to facilitate transactions independently from US influence.
The positive response to these initiatives highlights a collective effort to create a multipolar economic framework, where the dominance of the dollar is diminished. This initiative is attractive for countries looking to circumvent the limitations imposed by Western sanctions.
Interest from Around the Globe
According to President Vladimir Putin, a group of 34 countries has expressed interest in joining the de-dollarization push. These countries will feature prominently at the upcoming BRICS summit, showcasing a shared commitment to redefining the future of international finance.
Innovative Payment Tools Under BRICS
As BRICS evolves, a range of innovative payment tools is set to emerge. Some of the key developments announced include:
| Payment Tool | Description |
|---|---|
| SPFS | A Russian messaging system aimed at facilitating secure cross-border payments. |
| Common Account Unit | A gold-backed stablecoin designed to stabilize transactions within BRICS. |
| BRICS Pay | A digital payment platform launched in 2018 to streamline payments in national currencies. |
The Future of Cross-Border Payments
The BRICS nations are at the forefront of redefining payment systems and reducing dependence on the US dollar for international trade. With major plans to integrate national currencies and explore the adoption of cryptocurrencies, BRICS is setting a precedent for other economic alliances that may follow suit.
Source: HinrichFoundation. The shift towards the renminbi signifies a notable reduction in dollar use for trade as of March 2023.
Conclusion: Charting a New Economic Course
With BRICS consistently emphasizing the need for a collective push against dollar dominance, the alliance is poised to capture the global economic shift. Restricting reliance on traditional Western financial systems opens new avenues for economic cooperation and growth among emerging economies.
