BRICS Payment System: A New Era of De-Dollarization Through Crypto and Blockchain
Staff Writer • 2024-08-18
The BRICS nations are advancing toward de-dollarization by leveraging blockchain and cryptocurrency. As tensions with the West escalate, 159 countries have expressed interest in adopting the BRICS Payment System as an alternative to the U.S.-dominated SWIFT network. The BRICS Push for De-Dollarization The BRICS bloc—comprising Brazil, Russia, India, China, and South Africa—is reportedly contemplating the introduction of a gold-backed currency at the upcoming October 2024 summit. This move could further challenge the hegemony of the U.S. dollar in international trade. The BRICS nations are also exploring the possibility of using cryptocurrencies and blockchain technology to facilitate cross-border transactions, offering a potential bridge between the bloc and Western economies. Russia has already taken significant steps in this direction by legalizing cryptocurrency for cross-border settlements and mining. This initiative aligns with the broader BRICS strategy to reduce reliance on the U.S. dollar and create a more balanced global trade environment. A Growing Coalition of Support The announcement of the BRICS Payment System last month has garnered widespread attention and support. According to a Russian official, nearly 159 countries have expressed interest in adopting this new system. This level of international enthusiasm underscores the growing discontent with the perceived weaponization of the SWIFT network by the United States, particularly against nations that do not align with its geopolitical interests. The BRICS Payment System, which may utilize the Ripple blockchain, has put XRP and its underlying technology, the XRP Ledger, in the spotlight. As one of the most widely used blockchains for cross-border transactions, the integration of Ripple's technology could enhance the efficiency and security of the BRICS Payment System. The Challenges Ahead Despite the enthusiasm surrounding the BRICS Payment System, replacing the U.S. dollar as the dominant global currency will not be easy, especially when dealing with Western powers. The bloc's expansion could also introduce complexities, as multiple local currencies may complicate international trade. Kremlin aide Yury Ushakov emphasized the importance of developing an independent BRICS payment system that is both cost-effective and free from political influence. “Creating an independent BRICS payment system is an important goal for the future,” Ushakov stated, “which would be based on state-of-the-art tools such as digital technologies and blockchain. The main thing is to make sure it is convenient for governments, common people, and businesses.” Crypto as a Bridge Between East and West Cryptocurrencies could play a pivotal role in bridging the gap between BRICS nations and Western economies. Digital assets offer a global connection that transcends political affiliations, making them an attractive option for international trade. Even in the West, there is growing interest in embracing cryptocurrency, with figures like former U.S. President Donald Trump advocating for Bitcoin as a reserve currency. Russia's recent legislative moves, including President Vladimir Putin's signing of a bill to legalize crypto mining and cross-border payments, signal the country's increasing reliance on digital assets amid U.S. sanctions following the Ukraine conflict. As the BRICS bloc continues to explore the potential of crypto and blockchain, the world will be watching to see if other member nations, particularly China, will soften their traditionally anti-crypto stance. The October 2024 BRICS summit promises to be a pivotal moment in the ongoing global shift toward de-dollarization, with the potential to reshape the financial order as we know it.
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