Russia has proposed the creation of a new cross-border payment system for BRICS countries as part of an effort to circumvent financial sanctions and reduce dependence on the US dollar. This initiative was revealed ahead of the upcoming BRICS summit, as reported by Bloomberg.
Key Points:
- BRICS members: Brazil, Russia, India, China, South Africa, along with Iran, UAE, Ethiopia, and Egypt.
- The Russian Finance Ministry, Bank of Russia, and Moscow-based consultancy Yakov & Partners outlined a plan that includes:
- Establishing a network of correspondent banks to facilitate transactions in local currencies.
- Creating direct links between central banks for smoother cross-border payments.
- Setting up mutual trade hubs for commodities.
- Exploring the use of distributed ledger technology (blockchain) or a new multinational platform for settling payments with tokens.
Purpose:
The goal is to protect BRICS countries from external pressures, such as international sanctions, by developing an independent system. This move would shield participating nations from the effects of extraterritorial sanctions imposed by the West, providing a secure and autonomous financial network.