An alternative scheme developed by Moscow will reportedly work around dollar transactions in international payment operations
Russia is to present its project for a new international financial system to fellow BRICS nations at the group’s summit next week, Reuters is reporting, citing a document distributed by Moscow to journalists ahead of the event.
The system to be proposed is believed to be immune to Western sanctions and could put an end to US dollar dominance in international exchanges and transactions, the news agency said. According to the report, the new payment platform is based on blockchain technology and uses digital tokens backed by the national currencies of participating countries.
This format would allow such currencies to be easily and securely exchanged without the ubiquitous need for dollar transactions. The new platform reportedly also would rely on a network of commercial banks linked to each other through the central banks of BRICS countries.
The proposal is also said to involve the creation of a ‘BRICS Clear’ platform to settle trade in securities. It also encourages member states to create a common rating methodology but doesn’t mention creating a joint BRICS rating agency. The document reportedly also accuses existing international financial institutions, including the International Monetary Fund, of serving the interests of the US and its allies.
Moscow has not commented on the Reuters report and has not made public any documents such as the one cited in it. Last week, Russian Finance Minister Anton Siluanov presented a proposal on reform of the international financial system to other finance ministers and central bank heads of the BRICS nations.
On that occasion he also criticized the West for its attempts to use the international financial system and the US dollar as a means of political pressure. According to Siluanov, BRICS had been discussing alternatives to the Western-dominated global payment system, settlement depository, and ratings-agency regime.
The minister also said that new financial digital assets should be used in international payments. “It is faster, cheaper and more reliable. Operations are conducted without the involvement of the banks and infrastructure of third countries,” he explained. Nonetheless, specific details of the proposal remain unclear.
Russia has been actively reducing the use of dollars in its international transactions. More than 95% of mutual settlements between Russia and its biggest trading partner, China, are carried out using national currencies (the ruble and yuan), Russian Prime Minister Mikhail Mishustin said in August.
According to Siluanov, the BRICS countries will proceed even further to reduce the share of the US dollar in mutual transactions in favor of national currencies.
The BRICS summit is scheduled to be held in Kazan, southwest Russia next week. Moscow currently chairs the organization, which includes Brazil, India, China and South Africa, as well as Egypt, Iran, the United Arab Emirates and Ethiopia. More than 30 nations, including NATO member Türkiye, have applied to join the economic bloc, according to Russian officials.