🔹 Navigating Sanctions and Banking Challenges:
- China and Russia are turning to digital payments, including cryptocurrencies, to avoid slow, complicated banking systems affected by sanctions.
- Over half of Chinese trade payments are now in RMB instead of USD.
- The BRICS countries plan to link their financial systems using digital currencies, aiming for full independence from the US dollar.
🔹 The Move to Digital Payments:
- Traditional banking has become a nightmare for Russia, with transactions taking months to clear due to sanctions.
- Both countries are exploring faster, more efficient digital alternatives.
- Qifa, a digital platform operating in Beijing and Moscow, has emerged as a key player.
- Digital payments, including cryptocurrencies, can speed up transactions, sometimes completing them in just a day.
- With fewer Chinese banks willing to risk sanctions, digital methods are becoming increasingly critical.
🔹 Shifting Away from the US Dollar:
- The shift to digital payments isn't just about speed; it's part of a broader agenda to reduce reliance on the US dollar.
- BRICS countries have faced economic challenges due to the dollar’s dominance.
- Brazil has experienced economic instability due to dollar fluctuations.
- India’s stock market has been impacted by US investors pulling out their money.
- Russia and China have faced US sanctions, complicating international business.
🔹Russia's Search for Alternatives:
- Russia has allowed the use of stablecoins like USDT for international payments and is considering legalizing all cryptocurrencies for foreign trade.
- Last year, over half of Chinese payments in trade with Russia were settled in RMB, with only 42.8% in USD, highlighting the shift away from the dollar.
- BRICS countries are developing a new system called BRICS Bridge to link their financial systems using digital currencies from their central banks.
🔹 Looking Ahead:
- Russian President Vladimir Putin recently stated that 90% of trade between Russia and China now uses local currencies (rubles and yuan).
- A significant BRICS summit in Russia is scheduled for October 2024, where de-dollarization will be a key focus.
Stay informed and keep an eye on these developments!