In a recent report by TASS, a major state-owned news agency in Russia, Valentina Matviyenko, the Speaker of Russia’s Federation Council, announced significant progress on the BRICS digital payment platform, an initiative that could potentially revolutionize global financial transactions. This development comes as Russia continues to navigate the challenges of extensive international sanctions and its exclusion from the SWIFT payment network.
BRICS is an acronym representing a coalition of five major emerging economies: Brazil, Russia, India, China, and South Africa. The term was first introduced in 2001 by economist Jim O’Neill to describe these rapidly growing economies, which were expected to become dominant players in the global market. Over time, BRICS evolved from a concept into a formal intergovernmental organization, with its member countries cooperating on various fronts, including economic development, political coordination, and cultural exchange. The group’s mission extends to advocating for the reform of international financial and political institutions to better reflect the shifting global power dynamics.
As of August 2024, BRICS has undergone a significant expansion. During the BRICS Summit held in Johannesburg in 2023, it was announced that six additional countries would join the group, bringing the total membership to eleven. The new members, effective January 1, 2024, include Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE). This expansion underscores BRICS’ growing influence and strategic importance on the world stage.
The inclusion of these new members aligns with BRICS’ long-term goal of creating a more balanced global economic order, offering a counterweight to Western-dominated institutions like the International Monetary Fund (IMF) and the World Bank. By expanding its membership, BRICS aims to enhance cooperation among a broader spectrum of emerging economies, addressing global financial inequalities and promoting more inclusive international governance.
Per the TASS report, during a press conference on 1 August 2023, Matviyenko provided details about the BRICS Bridge, an independent financial payment platform being developed within the BRICS nations. This standalone system is designed for mutual payments across BRICS countries, offering an alternative to existing global financial networks.
Matviyenko highlighted the advanced stage of the project, emphasizing that discussions have moved beyond the theoretical stage. She noted that Russia, as the current chair of BRICS, is coordinating efforts with central banks and finance ministries of all BRICS member states, including newer members. According to Matviyenko, the platform’s development is progressing smoothly, with substantial input from key financial authorities.
Matviyenko expressed confidence in the platform’s potential impact, suggesting that if successfully implemented, it could have far-reaching global consequences. She referred to the project as a “bombshell in the best sense” and hinted at the possibility of the BRICS digital payment system being a key topic at the upcoming BRICS summit in Kazan this October. She hopes that the summit will either approve the platform or finalize details regarding its implementation.
This initiative is especially significant given Russia’s current financial situation. With the country facing persistent sanctions and a disconnection from SWIFT, the Bank of Russia has developed its own payment system, which has already attracted participation from several countries. Matviyenko pointed out that this demonstrates the viability of alternative financial systems in challenging circumstances.
Matviyenko also commented on broader trends in the global financial landscape, noting the weakening position of the U.S. dollar, partly due to the increasing U.S. national debt. She said that there is a growing movement towards conducting international transactions in national currencies, bypassing traditional systems like SWIFT.
Matviyenko believes that the BRICS digital payment system, once operational, could set a new standard in global finance, offering a model that other countries might choose to follow. Matviyenko mentioned that similar discussions are taking place within the Shanghai Cooperation Organization (SCO), further extending the potential reach and influence of this platform.
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