Russia's Initiative for Alternative Payment Platforms at BRICS Summit

By Gleb Bryanski
MOSCOW (Reuters) – Russia aims to persuade BRICS nations to establish an alternative international payment system immune to Western sanctions at the upcoming summit next week.

President Vladimir Putin is focused on strengthening BRICS, which now includes Egypt, Ethiopia, Iran, and the United Arab Emirates alongside Brazil, Russia, India, China, and South Africa, as a robust counterbalance to Western influence in global trade and politics.

The summit, taking place from October 22-24 in Kazan, is framed by Moscow as proof that Western attempts to isolate Russia have failed. It encourages collaboration among countries to reshape the global financial landscape, challenging the supremacy of the U.S. dollar.

A core aspect of this plan involves creating a new payment system that utilizes a network of commercial banks connected through BRICS central banks. This proposal, developed by Russia's finance ministry and central bank, suggests implementing blockchain technology to store and transfer digital tokens backed by national currencies, allowing for secure and straightforward currency exchanges without needing dollar transactions.

Russia believes this system could help address challenges in trade payment settlements, especially with nations like China, where local banks worry about U.S. secondary sanctions. Yaroslav Lissovolik, founder of the BRICS+ Analytics think tank, noted that while technically feasible, the implementation would take time.

Furthermore, the Russian document criticizes institutions like the International Monetary Fund for favoring Western interests and calls for BRICS members to develop a viable alternative. Alongside this, Russia proposes creating a "BRICS Clear" platform for settling trade in securities.

The document also emphasizes enhancing communication between credit rating agencies within BRICS nations, proposing a joint ratings methodology but refraining from suggesting a joint BRICS rating agency, a concept previously discussed.

Additionally, Russia, as the world's leading wheat exporter, advocates for establishing a BRICS grain trading exchange and a pricing agency to rival Western exchanges for international agricultural commodity prices.

However, while pushing these initiatives, Moscow faces challenges; most BRICS nations sent lower-ranking officials to last week's preparatory meeting rather than higher-level finance ministers or central bankers.

For the main summit, Russia anticipates the participation of leaders from all nine BRICS countries, alongside around 15 other nations eager to engage, including Saudi Arabia's foreign minister, who has been invited to join.

"BRICS is a structure that cannot be ignored," stated Kremlin aide Yuri Ushakov to reporters last week.