Russia is discussing the integration of its payment systems with the BRICS bloc, Central Bank of Russia Governor Elvira Nabiullina said, revealing that foreign participants from 159 countries have now been connected to Russia's new SPFS system.
Watcher.Guru reported that over the past few years, the BRICS alliance has been committed to strengthening its "de-dollarization" efforts. Under the influence of Western sanctions against Russia, this move is obviously to promote local currencies and alternative settlement methods. Although many people are skeptical, it is undeniable that it has remained popular so far.
The BRICS alliance refers to five major emerging economies, including Brazil, Russia, India, China and South Africa. The name comes from the acronym BRICS of the English names of these countries.
According to Nabiullina, 159 countries are ready to adopt the BRICS payment system once it goes live. In fact, these foreign players are looking to explore the expansion of the Russian SPFS payment system platform.
She explained that the SPFS system "is an alternative to the international payment system SWIFT."
SWIFT stands for The Society for Worldwide Interbank Financial Telecommunication. It is a financial communications infrastructure designed to connect the global banking industry. In simple terms, SWIFT is an international bank code or identification code. These codes are used when processing interbank transfers, especially for international wire transfers or SEPA transfers. Banks also use these codes to exchange information.
Moreover, Nabiullina added: “Similar infrastructure exists in some other countries and we are discussing the interaction of such platforms, but here the interest of partners and technological readiness are very important.”
Payment systems are becoming increasingly important to the alliance.
Viktoria Panova, chairwoman of the Russian BRICS presidency, said the mechanism is a priority for the upcoming BRICS 2024 summit.
“We are actively working to establish a financial payment mechanism that will make cooperation among BRICS countries easier and safeguard their sovereign trade and economic exchanges,” she said.
She added: “This issue is top of the agenda because every member of the BRICS considers it important.”
Currently, all parties are discussing how to interconnect these platforms, but this involves the interest and technical readiness of partners, which will determine the final implementation effect.
It is understood that the system may be officially launched in October this year, allowing unilateral settlement without using the US dollar. 159 countries are ready to connect and use the BRICS payment system when it goes online.
Nabiullina also mentioned that these current US sanctions have intensified Russia's need to develop alternative payment methods, while promoting digital currency negotiations for cross-border settlements between Russia and "friendly countries." The adoption of such digital currencies will be able to bypass traditional financial channels, thereby circumventing the risks brought about by sanctions.
As sanctions intensify, Russia is seeking to break the sanctions dilemma through cooperation with BRICS countries and promoting the use of digital currencies. The advancement of this process will not only change the way trade settlements between China and Russia, but may also have a profound impact on the future direction of the global financial system.
