China and Russia are abandoning traditional banking in favor of digital payments in their trade transactions. Sanctions on Russia have made banking a nightmare, with some transactions taking months to process. 

The trouble has prompted both countries to explore faster, more efficient digital alternatives. Qifa, a digital platform operating in Beijing and Moscow, has become a key player in this. 

Reportedly, they realized that using digital payments, including cryptocurrencies, could speed up transactions, sometimes completing them in just one day. 

With fewer and fewer Chinese banks willing to risk sanctions, these digital methods are becoming more and more important.

The move away from the US dollar

This adoption of digital payments is not just about speed. No, it's part of a larger agenda to move away from the US dollar. BRICS countries have been going through difficult times with the dominance of the dollar. 

Brazil has struggled with economic ups and downs due to changes in the value of the dollar. The Indian stock market was affected by the withdrawal of American investors. Russia and China also face US sanctions, making international business difficult.

Russia, in particular, began desperately searching for alternatives several years ago. So far, the country has allowed the use of stablecoins such as USDT for international payments, and there is even discussion in the Russian parliament about legalizing all cryptocurrencies for operations. foreign trade movement.

This could help Russia and its partners avoid using the dollar forever. Last year, more than half of China's payments in trade with Russia were paid in Yuan, its domestic currency. 

Only 42.8% were made in US dollars, showing a clear shift away from the dollar. BRICS countries are also working on a new system called BRICS Bridge, designed to link their financial systems using digital currencies from their central banks.

A few weeks ago, Russian President Vladimir Putin said that currently, 90% of trade transactions between Russia and China use local currencies, rubles and yuan.

There is a major BRICS summit coming up in Russia in October 2024 where this topic is expected to be a focus. Leaders from both old and new countries will devise a de-dollarization strategy.

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