BRICS eyes financial independence with cryptocurrencies

Russian President Vladimir Putin unveiled plans at the St. Petersburg International Economic Forum 2024 on Friday, announcing that the BRICS countries are collaborating on the development of an autonomous payment system.

This system, Putin stated, aims to operate independently from political influence, abuse, and external interference, potentially altering the landscape of the global financial system.

The initiative comes amidst growing concerns about the dominance of Western payment systems and the U.S. dollar in international transactions. Putin emphasized the need for alternative mechanisms to reduce reliance on traditional systems, asserting that trust in them has been significantly eroded.

One of the key features of the proposed payment system is its cryptocurrency-based infrastructure, which is expected to enhance security and transparency with the blockchain infrastructure. Additionally, Putin hinted at the system being backed by gold, a move that could potentially bolster its stability and attractiveness in international trade.

Highlighting the progress made in this direction, Putin noted that the share of the Russian ruble in international payments has tripled since 2021, reaching 40%. This increase reflects a growing trend among BRICS countries to diversify away from traditional currencies and explore alternative options.

“We are working on the formation of an independent payment system within the BRICS, not subject to external pressure,” Putin affirmed during his address, underscoring the commitment of member nations to forge a path towards financial autonomy.

The announcement also raised speculation about the possibility of expanding the BRICS alliance to include new member countries. While specific details about the structure and timeline of the proposed payment system remain undisclosed, Putin’s remarks have sparked discussions about its potential implications for the global economic order.

The development of this independent payment system underscores the growing desire among BRICS nations – Brazil, Russia, India, China, and South Africa – to assert financial autonomy and reduce reliance on traditional global financial infrastructures.

As the world witnesses geopolitical shifts and economic realignments, the emergence of alternative payment systems like the one proposed by BRICS could challenge the dominance of traditional financial powers and foster greater economic sovereignty among member nations.