Payment system proposed by Russia at BRICS Summit

Russia plans to create alternative payment system to decrease reliance on US dollar, reduce economic ties, and avoid Western sanctions.

Ahead of the BRICS Summit, Russia wants those members to agree on creating a new international payment system that will not be affected by Western sanctions. BRICS summit on 22-24 October in Kazan will focus on Russia's efforts to expand beyond the West by including Egypt, Ethiopia, Iran, and the UAE.

Vladimir Putin highlights meeting as proof of West's failure to contain Russia. Proposal includes new payment system using central banks of BRICS countries, with digitally issued tokens based on domestic currencies and no dollar transactions for currency exchange.

Moscow views this project as a key solution to problems connected with trade payments as, for example, in case of China, the banks are afraid of the US imposing sanctions even on their allies. Yaroslav Lissovolik, economist of the BRICS+ Analytics think-tank points to that such a system is operatively possible but the question is whether the enlarged membership will agree on it.

More than that, Russia has sought to create a “BRICS Clear” securities trading and is proposing to set up a grain trading exchange that will provide a counter to the Wests pricing administrators. But in populating these working groups the majority of the BRICS countries sent officials of a lower rank to the preparatory meetings, which gives a sense of difficulties in pushing these ideas forward.

The leader of all the nine BRICS nations as well as approximately fifteen other nations that act as partners to Russia are likely to attend the summit thereby further driving on Russia’s goal of increasing the bloc’s presence in the international arena.