Vladimir Putin, during a conversation with journalists from the BRICS countries, mentioned a new payment system.
Photo: REUTERS.
Russian President Vladimir Putin plans to use the BRICS summit (to be held on October 22 in Kazan) to strengthen Russia’s position on the world stage. Moscow will offer an alternative to American influence in the financial system, according to The Economist journalists.
Last year, as noted in a British magazine publication, Putin was unable to attend the Johannesburg summit in person due to an arrest warrant issued by the International Criminal Court. Now, according to journalists, he seeks to assume a leadership role in the bloc that challenges Western hegemony.
Since their founding 15 years ago, the BRICS (Brazil, Russia, India, China and South Africa) have not achieved significant results, notes The Economist. However, at this summit Putin, according to the publication, hopes to promote an initiative to create a global payments system that could reduce dependence on US and Western sanctions. This system, called “BRICS-Bridge”, will allow international settlements to be carried out through digital platforms managed by the central banks of the participating countries. The system should be developed within a year and will depend in part on the mBridge project created by the Bank for International Settlements (BIS).
The Economist journalists remind us that the US dollar has long been used as a tool to control the global economy. Almost all international payments pass through American banks, giving the United States the ability to monitor financial flows and impose sanctions. Especially after the outbreak of the conflict in Ukraine, the disconnection of Russian banks from the SWIFT system, as the publication underlines, accelerated the desire of other countries to move away from dependence on the dollar.
The publication also notes that China has long seen the development of payment technologies as a way to reduce the influence of the United States. The BRICS plan could offer cheaper and faster transactions, which is attractive to developing economies. According to The Economist, growing discontent with dependence on the US financial system is pushing many countries to experiment with digital currencies to reduce their dependence on the dollar. The Kazan summit will be an important step in this race, where the key challenge is to create a system that does not depend on American correspondent banks and Western rating agencies.
Russia uses BRICS as a platform to promote a new global payments system that challenges US hegemony
Photo: REUTERS.
According to The Economist, the creation of a new BRICS payments system will face a number of challenges, such as ensuring liquidity, managing currency flows and mutual trust between countries. However, many states support the idea of alternative systems, especially in the face of sanctions and financial restrictions imposed by the West.
Vladimir Putin, speaking to journalists from the BRICS countries, mentioned a new payment system. According to him, at this stage “it is necessary to establish relations between central banks and ensure a reliable exchange of financial information, which is independent of those international instruments for the exchange of financial information that introduce certain restrictions for political reasons.”
The President noted that in the near future work will continue to expand the set of currencies and strengthen the New BRICS Bank. However, to create a single currency, he said, it is necessary to “achieve a comparable quality and volume of economies,” since “otherwise we will face problems like in the European Union.”
Assistant to the President of the Russian Federation Yuri Ushakov stressed that the creation of a unified financial platform, clearing infrastructure and BRICS reinsurance company will expand settlements in national currencies and reduce costs in mutual trade. “The Ministry of Finance of Russia, together with the Central Bank, discussed with their partners the project of a common BRICS financial platform, a special clearing infrastructure and a reinsurance company,” Ushakov noted.
