Dedollarisation: BRICS nations to create independent payment system based on digital technologies & blockchain

The call to reduce dependency on the US dollar is once again picking up pace with BRICS members considering another dedollarisation move by planning to create an independent payment system based on digital currencies and blockchains.

Russian news agency TASS said the revelation was made by Yury Ushakov who has been an advisor to the Russian president Vladimir Putin on foreign policy issues since 2012.

Payment system based on digital technologies

“We (Russia) 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,” Ushakov said.

“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,” he added.

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‘Currencies different from US dollar’

Five nations - Brazil, Russia, India, China and South Africa – constitute the BRICS group.

The report further said Ushakov recalled that in the 2023 Johannesburg Declaration the leaders set the focus of BRICS countries on increasing overseas trade and settlements in national currencies as well as strengthening correspondent banking networks to secure international transactions.

“Work will continue to develop the Contingent Reserve Arrangement, primarily regarding the use of currencies different from the US dollar,” Ushakov said.

Last year, leaders of BRICS nations said they want to use their national currencies more instead of the dollar, which strengthened sharply in 2022 as the Federal Reserve raised interest rates and Russia invaded Ukraine, making dollar debt and many imports more expensive.

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Russia’s sanctions-imposed exile from global financial systems in 2022 also fuelled speculation that non-western allies would shift away from the dollar.

Meanwhile, once independent payment system based on digital currencies and blockchain is created, it is expected to set precedence for other countries in-terms of including digital currencies into their existing systems.

With inputs from agencies