At the Russian Energy Week forum in Moscow, President Vladimir Putin announced that the BRICS nations are actively working on creating their own payment and settlement system. This initiative is aimed at reducing dependence on Western financial structures like SWIFT, from which Russia has been disconnected due to sanctions imposed in response to the Ukraine conflict.
A Shift Toward National Currencies
Russia has already been transitioning to the use of national currencies in trade with BRICS nations—Brazil, Russia, India, China, South Africa, along with new members Iran, Egypt, Ethiopia, and the UAE. Putin emphasized that this payment system will strengthen economic cooperation among BRICS members, creating a platform where member states can efficiently conduct foreign trade without relying on the US dollar or the euro.
The Russian ruble's share in the country’s foreign trade has grown significantly in recent years, accounting for 39.4% of all trade in 2023. This figure marks a threefold increase from 2021, with further expansion expected as Russia continues to deepen ties with BRICS countries.
The BRICS Bridge: A Blockchain-Based Alternative
Rather than establishing a common currency right away, BRICS is focusing on developing a blockchain-based platform called the BRICS Bridge Multisided Payment Platform. This innovative system will connect member nations’ financial networks, enabling settlements via central bank digital currencies (CBDCs). The BRICS Bridge is designed to be an alternative to SWIFT, which is currently dominated by the US and European Union, providing an independent cross-border payment solution that is secure and cost-effective.
The Kremlin envisions this system as a politically neutral and technologically advanced solution that meets the needs of both businesses and individuals in BRICS countries. It will also provide a crucial buffer for countries that face the threat of economic sanctions from the West.
The Unit: A Future BRICS Currency?
While the BRICS Bridge is the immediate focus, discussions are ongoing about the creation of a BRICS-wide currency, tentatively called The Unit. This common currency would be pegged 40% to gold and 60% to a basket of BRICS members' national currencies. The goal is to create a stable and universal instrument for trade, which can be converted into any national currency, helping to further decouple from the US dollar.
However, the rollout of this currency remains a long-term project, with estimates suggesting it could take until 2030 for full implementation. In the meantime, BRICS members will continue to reduce their holdings of US dollars, especially China, which has been the most active in diversifying its reserves.
Impact on Global Markets and the US Dollar
The potential disruption to the US dollar as the world’s dominant reserve currency has not gone unnoticed. Earlier this month, Nasdaq warned that a BRICS currency could lead to a significant decline in demand for the dollar, accelerating the process of "de-dollarization." Such a shift would have far-reaching consequences, not just for the US but for the global economy.
Nasdaq also highlighted that investors may look for opportunities in currencies other than the dollar, suggesting that shifts in global financial markets could present lucrative prospects for those prepared to navigate the changing landscape.
The BRICS Ratings Agency: An Alternative to Western Agencies
Another initiative under discussion is the establishment of a BRICS Ratings Agency, independent of Western agencies like Moody’s, S&P, and Fitch. After these agencies withdrew from the Russian market following sanctions, it became difficult for Russian companies to obtain accurate and impartial credit evaluations. Both Russia and China have raised concerns that Western agencies have been pressured to undervalue their businesses, making it more expensive to attract foreign investment.
A BRICS-based ratings agency would address these concerns, potentially involving the BRICS New Development Bank to ensure transparency and credibility. Such an agency would allow BRICS nations to provide independent financial evaluations, which could make it easier for companies within the bloc to raise capital. Augusta Precious Metals $0 (10 Years) $50,000 "Best Overall" by Money Magazine, Award-Winning for 6 Years, Thousands of 5-Star Rankings Goldco Vary $25,000 Industry leader with over $2 Billion in gold and silver. Top rated precious metals company with buy back guarantee Birch Gold Group Vary $10,000 Since 2003 BGG served over 32,000 customers. A+ rating with BBB, AAA from BCA & has multiple celebrity endorsements While the BRICS Bridge is expected to become operational as early as 2026/27, technical trials between Russia and China are already underway. Both countries possess their own internal payment systems—SPFS in Russia and CIPS in China—and have been testing their compatibility with each other. The primary challenge is to create a unified platform that integrates the systems of other BRICS members while maintaining the highest levels of cybersecurity. By mid-2025, digital trade between Russia and China is expected to begin in earnest, serving as a trial for the broader BRICS financial platform. If successful, the BRICS Bridge will lay the foundation for a comprehensive payment system, marking a significant shift in global financial dynamics. The development of the BRICS payment system signals the beginning of a new era in global finance, where regional blocs may start to challenge the dominance of Western financial institutions. Should the BRICS Bridge succeed, it could inspire other economic groups to develop similar systems, potentially accelerating the decline of SWIFT and the influence of the US dollar and euro in international trade. As BRICS nations continue to build independent financial infrastructures, the global monetary landscape may soon reflect a multipolar world where sovereign currencies play a more prominent role in determining economic power. Featured Partners (Ad)Expand Details
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A New Era of Sovereign Currencies
