A new independent payment system has received approval for use within the BRICS group, signaling a potential departure from reliance on the US dollar.
There is speculation about whether this system will incorporate cryptocurrencies such as Bitcoin or Ripple’s XRP for international transactions.
Russian President Vladimir Putin has officially sanctioned the advancement of an alternative currency strategy for the BRICS group, indicating a significant shift towards using Ripple’s XRP for cross-border payments. This move suggests a transition towards a more self-reliant financial framework.
Unveiled at the SPIEF 2024 Conference, the innovative payment system aims to strengthen national currency sovereignty and protect against political and sanction pressures, utilizing blockchain technology for enhanced security and resilience against external interference.
Designed to be “completely digital, equitable, and cost-effective,” the system prioritizes inclusivity for governments, businesses, and the general public. Additionally, BRICS nations are working to bolster banking networks and increase trade using national currencies, with plans to expand the Contingent Reserve Arrangement to diversify currency usage beyond the US dollar.
The proposed payment system will integrate blockchain technology, demonstrating a commitment to cutting-edge digital tools that ensure a secure platform resistant to external manipulation.
Emphasizing inclusivity and efficiency, Kremlin aide Yury Ushakov stated in an interview with the Russian state-owned news outlet TASS that the system will be “fully digital, fair, and cost-effective.” This design aims to cater to the needs of governments, businesses, and the public, with a focus on establishing a politically impartial framework.
As the system progresses, there is a concerted effort within the BRICS to expand banking networks and promote trade using national currencies. This initiative includes enhancing the Contingent Reserve Arrangement to broaden currency usage beyond the US dollar.
The choice between Bitcoin and Ripple’s XRP is crucial due to their transactional efficiency and cost-effectiveness. Currently, Ripple’s XRP is trading at $0.498, with a 0.63% increase in the past day despite a 4.21% decrease over the past week, underscoring its potential suitability for the system.
These measures mark a significant move towards economic independence for the BRICS, showcasing their strategic shift towards advanced technological financial solutions.