Moscow bats for digital currency settlements
-: R Muthu Kumar :-
Russia is discussing with other BRICS countries the integration of national financial message transmission systems, and currently 159 foreign participants from 20 countries have already joined the Russian platform.
Russia has a Financial Messaging System that is an alternative to SWIFT. Some other countries have similar infrastructure. And they are discussing the interaction of such platforms, but the interest and technical readiness of our partners are important here.
On whether the BRICS countries are ready to integrate national financial communication systems is being discussed by economic experts, but it is pertinent to note that a total of 159 foreign participants from 20 countries have already joined the Russian system, officials concerned on this issue have said recently.
Furthermore, the Russian Central Bank is holding talks with many friendly countries on cross-border settlements in digital currencies. And Russia is currently holding consultations and negotiations with many friendly countries and, of course, with the BRICS countries on cross-border settlements in digital currencies.
The share of the BRICS countries in Russia’s trade balance has doubled in two years to 40 per cent, and settlements with those countries in national currencies have more than tripled to 85 per cent.
The share of the BRICS countries in Russia’s foreign trade has significantly grown, the Central Bank data reveals.
Russia will raise the issues of mutual recognition of ratings and the creation of a joint anti-money laundering platform in BRICS as it chairs the BRICS this year.
With all the geopolitical and economic upheavals happening globally the BRICS Pay has not come to limelight.
BRICS Pay is a new financial settlement platform for the member countries to use. BRICS Pay is a joint venture between the five BRICS countries (Brazil, Russia, India, China and South Africa) that was launched in 2018 by the BRICS Business Council among the top priorities in the Annual Report. The team behind the venture consists of individuals from all five countries.
The main goal is to enable trade and financial transactions between the BRICS countries by bypassing the United States dollar and Euro, and reducing dependency on Western Financial systems such as SWIFT.
BRICS Pay set benefits from a combination of traditional payment systems and new technologies such as central bank digital currencies (CBDC), decentralised finance, and tokenised assets (secured money). The system uses a distributed ledger technology (DLT) to facilitate transactions, which are recorded on a blockchain.
It appears that Brics Pay has now been launched as a new financial settlement platform. It is hoped and seen as a vehicle that will change the volume of trade and the volume of financial transactions between the BRICS members by making payments easier.
The original BRICS include Brazil, Russia, India, China, and South Africa. From January next year, they will likely be joined by Argentina, and five MENA influential countries: Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE.
Payments and transactions however will not be denominated in US Dollars. Instead, the BRICS member countries are focused on de-dollarization and using their respective national currencies. The new Brics Pay system is likely to accelerate this process.
The State Bank of India has launched a Brics Pay based mobile app for cross border transactions, while Russia’s Sberbank has partnered with Brics Pay so that its customers to make cross border payments. Likewise, Russia’s VTB bank has also integrated Brics Pay into its systems allowing its customers to make fast and secure payments to other BRICS countries.
The Bank of China has integrated Brics Pay into its systems, as has Beijing based ICBC, one of the largest banks in the PRC. It has also adopted Brics Pay for cross border transactions. In Brazil, Petrobras has begun to use Brics Pay for cross border transactions as well. At the root core of Brics Pay is the New Development Bank, (sometimes referred to as the BRICS Bank as it is collectively owned by BRICS member countries) where all financial transactions between BRICS nations are processed.
However, BRICS Pay is not just restricted to BRICS. The UK’s Standard Chartered Bank has integrated Brics Pay into its digital payment platform to enable its customers to make payments to other BRICS countries.
