The BRICS group-comprising Brazil, Russia, India, China, and South Africa-is expected to discuss a groundbreaking proposal for a new global financial system at its upcoming summit in Kazan, Russia. The proposed system, which is being championed by Moscow, seeks to bypass dollar transactions in international payment operations, presenting a significant challenge to the dominance of the US dollar in global financial markets.
The proposal, based on blockchain technology, aims to develop an alternative payment platform using digital tokens backed by the national currencies of participating BRICS countries. This would allow for secure, fast, and cost-effective transactions between member states without relying on the dollar, a currency that has long been central to international trade and finance. According to reports, the initiative is designed to be immune to Western sanctions, reflecting Russia’s intent to protect itself and other BRICS nations from the political leverage exerted through the dollar-based financial system.
The idea of reducing dependency on the US dollar is not new within the BRICS bloc. Russia and China, in particular, have been actively seeking ways to lessen their reliance on the dollar, especially as Western nations, led by the United States, have increasingly used financial sanctions as a geopolitical tool. Russian Prime Minister Mikhail Mishustin, for instance, recently stated that over 95 percent of trade between Russia and China is now settled in their respective national currencies-the ruble and the yuan.
The system Russia will present at the summit builds on this momentum. According to a report by Reuters, the payment platform would facilitate direct exchanges of currencies using blockchain technology, allowing BRICS countries to bypass the US-controlled SWIFT system for international transactions. By eliminating the need for the US dollar as an intermediary, member nations could conduct business more freely and mitigate risks associated with political and financial sanctions.
At the heart of the proposed system is blockchain technology, which would enable secure, decentralized transactions between BRICS nations. Digital tokens, backed by national currencies, would replace traditional fiat currency exchanges. This technological shift would allow for seamless conversion between currencies while ensuring transparency and security.
Blockchain has already demonstrated its potential in revolutionizing financial transactions by removing intermediaries and reducing costs. For BRICS countries, adopting this technology on a global scale represents a strategic move to modernize their financial systems while reducing dependency on Western-controlled financial infrastructure. It also aligns with Russia’s recent push toward digital financial assets in its efforts to circumvent sanctions imposed by Western nations following the invasion of Ukraine.
Russian Finance Minister Anton Siluanov has been an outspoken critic of the West’s use of the dollar and international financial systems as political weapons. During a recent meeting with BRICS finance ministers and central bank heads, he reiterated the need for alternatives to Western-dominated payment systems, settlement mechanisms, and ratings agencies. Siluanov argued that current international financial institutions, such as the International Monetary Fund (IMF), disproportionately serve US and allied interests, a criticism echoed in Moscow’s broader foreign policy.
Russia’s proposed system does not only aim to reduce the BRICS countries’ dependence on the dollar but also envisions the creation of a “BRICS Clear” platform to settle trade in securities. The proposal includes the development of a common rating methodology, although it stops short of advocating for a unified BRICS rating agency.
This multilateral approach could significantly shift the dynamics of global finance. By creating an ecosystem that allows member states to trade using their own currencies, BRICS would be taking a decisive step toward financial independence from the West. It also signals the bloc’s desire to offer an alternative to the US-led global financial architecture, which has remained largely unchallenged since World War II.
More than 30 countries, including NATO member Türkiye, have applied to join the BRICS bloc, according to Russian officials. The growing interest in BRICS suggests that many countries are looking for alternatives to the dollar-centric financial system, particularly those that have faced economic or political pressures from Western countries. With the inclusion of new members like Egypt, Iran, the United Arab Emirates, and Ethiopia, the bloc is poised to expand its influence significantly.
Moscow’s proposal is a direct challenge to the current global financial system, which has been built around the US dollar for decades. The dollar’s status as the world’s primary reserve currency has allowed the United States to exert considerable influence over international markets, and sanctions tied to the dollar-based system have become a powerful tool in US foreign policy.
However, as Russia’s efforts to reduce dollar dependency show, this influence comes at a cost. Countries that find themselves on the wrong side of US policies can be cut off from international markets, as seen in Russia’s case following sanctions over its actions in Ukraine. Moscow’s push for an alternative financial system suggests that these tactics have spurred a growing desire for financial autonomy, not only in Russia but across the BRICS nations.
This sentiment is reflected in the group’s long-standing discussions on creating alternatives to Western-dominated institutions. While the BRICS New Development Bank was established to offer an alternative to the IMF and World Bank, the new proposal aims to further challenge Western financial dominance by reducing the reliance on institutions like SWIFT for payment processing.
Although the details of Russia’s financial proposal remain unclear, the broader strategy appears aimed at creating a resilient and autonomous financial ecosystem for BRICS nations. By promoting the use of national currencies and blockchain technology, the group is positioning itself to reduce the risks posed by political interference and sanctions from the West.
The upcoming BRICS summit in Kazan will be a critical moment for the bloc. If the proposal gains traction, it could mark the beginning of a significant shift in global financial systems, with profound implications for the dollar’s role in international markets. While the success of the initiative will depend on the willingness of BRICS members to fully embrace these changes, Moscow’s push for financial independence has undoubtedly sparked a conversation about the future of global trade and finance.
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