The BRICS countries have long been trying to move away from the dollar, but the creation of a common currency blocks the dominance of the Chinese economy, so any common currency will de facto be the yuan, IntelliNews reports.
However, Kremlin aide Yury Ushakov told Russian media that a solution has already been proposed: a new blockchain-based payment system called BRICS Pay will be used instead of a currency. He said:
“We believe that creating an independent BRICS payment system is an important goal for the future, which would be based on state-of-the-art tools such as digital technologies and blockchain. The main thing is to make sure it is convenient for governments, common people and businesses, as well as cost-effective and free of politics.”
Ushakov added that the goal for this year is to increase the BRICS’ role in the international monetary and financial system. In 2023, the organisation’s members, according to the Johannesburg Declaration, will work to increase settlements in national currencies and strengthen correspondent banking networks to ensure the security of international transactions. The Kremlin aide pointed out:
“Work will continue to develop the Contingent Reserve Arrangement, primarily regarding the use of currencies different from the US dollar.”
Russia has already increased the use of national currencies in mutual trade with friendly countries to 75 per cent, and a BRICS summit is planned for Kazan this summer.
This is not a new common BRICS currency, but an analogue of SWIFT for transactions in national currencies in digital form, powered by blockchain technology. Apparently, it will be integrated with digital versions of the ruble, yuan, rupee, etc., the creation of which is also expected very soon.
Russia has accelerated its plans for digital currencies that operate outside the control of international regulators. The Central Bank of Russia (CBR) is working on the creation of the long-discussed central bank digital currency (CBDC), the digital ruble, which is expected to enter circulation in 2025.
Under new legislation, the Central Bank of Russia will be given the status of operator of the digital ruble platform in 2023. The regulator will be responsible for the security of digital rubles in circulation, as well as for the organisation and round-the-clock operation of the platform.
CBDC is not a blockchain-based “coin” like those issued by other blockchain-based projects, but an electronic currency, as the CBR controls the issuance of tokens, which are also supervised by the central bank, just like the issuance and regulation of fiat currencies.
In August last year, the CBR launched a digital ruble pilot project with several commercial banks in preparation for the official launch of digital money. The CBR also released a series of digital currency guides, “The Digital Ruble: What it is and How to Use It”. First Deputy Governor of the Bank of Russia Olga Skorobogatova said at a press conference at the time of the start of the pilot:
“We were preparing a long while for the start of real transactions. This pilot will involve, in the first instance, testing of such active transactions as the opening of wallets in digital rubles for banks, clients (individuals and legal entities), transfers of digital rubles between clients and payments in trade and service businesses.”
