Key Points:
- BRICS explores launching a global payment system to bypass SWIFT.
- Finance ministers from BRICS nations to discuss the proposal.
- The move aims to strengthen trade in local currencies and reduce US dollar dependency.
The BRICS, a global economic alliance comprising Brazil, Russia, India, China, and South Africa, is reportedly exploring the possibility of launching a worldwide payment system that could potentially circumvent the established banking industry standard, SWIFT.
According to a recent report from TASS, a Russian state-funded news agency, finance ministers from the BRICS nations are currently assessing the viability of establishing a unified payment network. They are set to formally deliberate on this proposal during the upcoming BRICS meeting scheduled for next year.
Russian Finance Minister Anton Siluanov stated that such a network would empower independent initiatives aimed at creating payment messaging systems. He noted, “We are striving to introduce our own financial messaging system, the SPFS, while our Chinese counterparts have their own system, and other BRICS countries either have their systems in place or are in the process of developing them. Hence, this matter will be deliberated by the monetary authorities and financial institutions of BRICS member nations.”
This development follows BRICS’s decision to expand its membership by incorporating Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the UAE into the alliance.
When queried about Russia’s perspective on BRICS’s future potential, Siluanov emphasized the bloc’s commitment to “breaking free from Western to Eastern ties,” a trend he anticipates will continue.
SWIFT is a fundamental component of the global banking system, enabling banks to securely exchange financial messages. In March 2022, the organization, primarily owned by banks, adhered to the European Union’s request and suspended several Russian banks.
In August of the same year, South Africa’s Finance Minister, Enoch Godongwana, expressed the idea that a BRICS-oriented payment system would aim to bolster trade conducted in local currencies rather than the US dollar. Nevertheless, he acknowledged that implementing such a system would be challenging and emphasized that its purpose would not be to directly challenge SWIFT.
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