BRICS countries are moving toward embracing digital currencies as part of their strategy to reduce reliance on Western financial systems. During a business forum in Moscow, Russian President Vladimir Putin encouraged BRICS members to consider cryptocurrencies and other digital currencies as alternatives to the SWIFT payment system, aiming to decrease dependence on the US dollar in financial transactions.
JUST IN: BRICS to use digital currencies for investment developments. pic.twitter.com/i7u7JFsC55
— BRICS News (@BRICSinfo) October 18, 2024
Putin emphasized the benefits that BRICS and other developing economies could gain by adopting digital currencies. He called for discussions among BRICS members on how digital money could be used in investment projects. He also noted that this shift would not only benefit BRICS but also help other emerging markets that are eager to modernize their financial systems.
However, Putin stressed the importance of establishing a solid regulatory framework before fully adopting digital currencies. He highlighted the need for a comprehensive set of rules to be crafted by BRICS nations to ensure the safe and efficient use of crypto in financial transactions.
The global adoption of cryptocurrencies and digital currencies is steadily increasing, as they offer a way to bypass traditional banking systems. Some countries are also developing Central Bank Digital Currencies (CBDCs)—digital versions of their national currencies that are issued and controlled by their central banks.
Two BRICS members, Russia and China, have already made significant progress in the digital currency space. Russia has announced that it will start pilot testing its digital rouble next year. Selected individuals and companies will take part in the trials, using digital roubles for everyday purchases. China, on the other hand, has advanced its Digital Currency Electronic Payment (DCEP) system, also known as e-CNY. This system is managed by the Central Bank of China and has gained significant traction, with over 261 million wallets opened and transactions worth 87.565 billion yuan processed by the end of 2021.
In addition to digital currencies, BRICS has introduced BRICS Pay, a new payment platform aimed at replacing the SWIFT network for cross-border transactions within the bloc. This new blockchain-based platform is seen as a key milestone in BRICS' efforts to create an economic system that is independent from traditional power structures and capable of evading US sanctions. BRICS Pay reflects the desire of member countries to build a self-reliant framework for financial transactions.
The move toward digital currencies and the launch of BRICS Pay represent the bloc's effort to secure greater economic independence and reduce the influence of Western financial institutions. With these new developments, BRICS is positioning itself to lead the charge in reshaping global finance for emerging economies.