In a business forum held in Moscow on Friday, adopting crypto took centre stage as one of the main engagements among the BRICS member states.
BRICS, which comprises Brazil, Russia, India, China, and South Africa, is seeking ways to introduce another payment system in place of SWIFT in order to lessen dependence on Western financial systems.
“US dominance in the world economy, or rather, the dollar, hinders the development of BRICS countries,” Putin said. He also went ahead to propose the use of cryptocurrencies during the forum as a cash alternative and asked the other BRICS members to do the same in order to cut back dependence on the US dollar.
“Other countries can use it in their trade, transactions with other countries are possible. I would support at the head of this economic bloc these opportunities,” he said while addressing the usefulness of adopting cryptocurrencies to BRICS countries and other developing nations.
Putin, however, emphasized that prior to attempting the idea there should be detailed regulations, he added that there is a need to create crіtical controls set by the BRICS before moving into the adoption of crypto.
Countries adopting digital currencies like cryptocurrencies have been on the rise with the ability to avoid traditional banking structures being an important factor.
Others are also using what is known as Central Bank Digital Currencies (CBDCs), which is the electronic version of the currency of their country. In most cases, the central bank issues CBDC and controls its circulation.
Some of the BRICS member states, Russia and China in particular, have already tapped into the use of digital currencies.
Russia said that it will pilot test its digital rouble starting from July next year. This phase of the implementation involves testing by some individuals and companies making transactions with digital roubles.
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Whereas, china has been able to achieve a lot of success in this field by its DCEP. DCEP or e-CNY, initiated by the government of China and run by the Central Bank of China, is a digital payment solution to the public demands around modern solutions.
By the end of 2021, the number of opened wallets reached 261 million, with more than 87.565 billion Chinese yuan worth of transactions.
Launch of BRICS Pay
In addition to introducing digital currencies, BRICS also presented the alternative payment system which is equal to the SWIFT payment system.
In a joint statement, the member countries instituted BRICS Pay, which is seen as a watershed moment in increased financial transactions between BRICS countries. The blockchain platform would enhance cross-border trade within the bloc and provide an alternative to SWIFT while circumventing US sanctions.
In addition, BRICS Pay embodies the motivation of its members to seek the creation of an independent economic structure which is not subordinated to the ‘traditional’ centres of power.