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BRICS to Develop Blockchain-Based Payment System
BRICS has announced the creation of a blockchain-based payment system. Over the years, the nine country-grouping comprising Brazil, Russia, India, China, and South Africa as founding nations has been working on reducing its reliance on the United States dollar for settlements. The new payment system offered by BRICS will serve as an independent system for trade settlements, challenging the US dollar.
This development was revealed by Russia – which assumed the BRICS presidency on January 1, 2024 – through Kremlin aide Yury Ushakov in an interview with Russian news agency TASS. He revealed that the system would be available to governments, businesses, and individuals.
“We believe that creating an independent BRICS payment system is an important goal for the future, which would be based on state-of-the-art tools such as digital technologies and blockchain. The main thing is to make sure it is convenient for governments, common people and businesses, as well as cost-effective and free of politics,” Ushakov stated.
According to Ushakov, BRICS’ focus this year is to increase its participation in the international monetary and financial system. He alluded to the 2023 Johannesburg Declaration in which BRICS leaders pledged to increase settlements in their respective national currencies and strengthen correspondent banking networks to bolster the security and efficiency of cross-border financial transactions.
Ushakov did not reveal a timeline for the payments system’s launch but it is likely to be unveiled at BRICS’s 16th summit in October this year.
BRICS Expected to Control 37% of World’s GDP
According to Ushakov, a lot of nations view BRICS as a prototype of a structure uniting the global South and East. In the time leading up to its 15th Summit last year, the group reportedly had more than 20 applications from nations seeking to join.
“Such a high prestige and a really serious constructive role of BRICS in the world economy and politics naturally attract the attention of other countries, which have begun to show a desire to join the association’s activities in one way or another. Many perceive BRICS as a prototype of multipolarity, a structure uniting the Global South and East on the principles of equality, sovereignty and mutual respect,” Ushakov said.
Among other things, the 15th Summit resulted in a decision on which countries would be admitted. Five new countries have been invited to join the grouping this year – Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE). Of these, Saudi Arabia is yet to confirm its membership.
The summit also resolved that the name BRICS would remain unchanged despite the expansion. Ushakov noted that this was to “further emphasize the continuity of our work in the association, as well as the key role of the founding countries”.
In a recent conference, Russian President Vladimir Putin stated that BRICS had the potential to control 37% of the world’s GDP by 2028. This would place the group above the G7 bloc of Western countries whose global GDP control would dip below 28%, according to Putin.
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BRICS to Develop Blockchain-Based Payment System