What is the Digital Assets Platform discussed by the BRICS group?
In October, Russian President Vladimir Putin confirmed that the BRICS countries are in discussions about using digital currencies to reduce Western influence on fintech. Currently, the group is considering the creation of a digital asset platform aimed at reducing dependence on US dollars for international transactions. President Putin has expressed his support for this initiative, emphasizing that digital currencies can benefit not only the BRICS countries, but also other developing economies.
According to Putin, the BRICS countries plan to launch a service tentatively called BRICS Pay reported by CryptoBriefing. This platform will be used by member states including Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia and the United Arab Emirates.
The platform is built on a blockchain network and is expected to facilitate cross-border settlements for the aforementioned countries. Financial assets such as cryptocurrencies and CBDCs will enable transactions without the need for brokers or intermediaries. Additionally, using digital assets for payments can reduce the service fees typically charged by payment facilitators for fiat currency transactions.
To support these digital currency payments, the BRICS countries are also looking to launch a messaging system like SWIFT – a secure information sharing platform used by various financial institutions.
The BRICS group has been trying to implement de-dollarization since earlier this year. In March this year, Russian publication TASS reported that the group has proposed the creation of a potential decentralized platform to integrate digital assets into the existing financial systems of the economies involved.
In recent years, the US dollar has experienced significant volatility due to successive rate hikes in the post-COVID-19 era. For China and Russia, the need to reduce dependence on the dollar is particularly urgent, as the US has imposed multiple sanctions on payments originating from these countries.
The 16th BRICS Summit was held in Kazan, Russia between October 22 and 24. The issue of navigating the current international payment systems, which according to the BRICS are dominated by the dollar, became reportedly one of the most important agenda items during the meeting.
It is worth noting that India is also working with the G20 countries to develop a comprehensive set of global crypto regulations. However, the RBI and Indian Finance Ministry officials are yet to reveal any details about the digital asset platform currently being discussed by the BRICS group.
