• Russia is developing a government-backed blockchain-based payment system to be used in international trade between BRICS allies.
• Last year, the BRICS economic group invited six new nations to join, including Saudi Arabia and the United Arab Emirates.
• According to the Kremlin, the new digital payment system will be convenient for governments, people and businesses to use, cost-effective and free of politics.

Last year, the BRICS economic alliance of Brazil, Russia, India, China and South Africa invited six new countries in an unprecedented expansion. With the likes of Saudi Arabia and the United Arab Emirates invited to join the bloc, assertions from BRICS leaders that the alliance would be looking for unified trading currencies to move away from the US Dollar gained a bit more credence.

The alliance may be moving a bit closer to that, as the Russian leadership via the Kremlin has announced the creation of a new blockchain-based payment system to be used as a means for BRICS nations to trade with each other.

This announcement came directly from the Russian news agency TASS, issued last week. The new payment system will be based on digital currencies, like cryptocurrency and be on a decentralised platform.

“We believe that creating an independent BRICS payment system is an important goal for the future, which would be based on state-of-the-art tools such as digital technologies and blockchain,” explained Yury Ushakov, an aid at the Kremlin.

In terms of what the system will look like, Ushakov says “The main thing is to make sure it is convenient for governments, common people and businesses, as well as cost-effective and free of politics.” It is important to note that the Kremlin does not have the most glowing track record in terms of honesty.

As for the currency system that will replace the US Dollar in international trade between BRICS nations, the Kremlin says that work is still being done in that regard – one of the key focuses of the 2023 Johannesburg Declaration.

“Work will continue to develop the Contingent Reserve Arrangement, primarily regarding the use of currencies different from the US dollar,” Ushakov said.

In terms of digital currencies, South Africa is still somewhat behind other nations. In October 2022, the country finally declared that cryptocurrencies were financial products. Firms that offer crypto products in the country require licenses as of May 2023, and crypto adoption otherwise remains niche among South Africans.

The Kremlin has not indicated when the blockchain-based BRICS system will be introduced, or even how far it is in development.

[Image – CC BY-ND 2.0 GovernmentZA on Flickr]