bne IntelliNews – BRICS announces blockchain-based payment system to create common currency

The BRICS countries have long sought to break away from the dollar, but the dominance of China’s economy within the group makes it impossible to create a common currency, which would effectively become the renminbi. .

However, Kremlin aide Yuri Ushakov said in an interview: Tas It has been suggested that a new blockchain-based payment system called BRICS Pay could be used instead of currency as a solution.

“We believe that building an independent BRICS payment system, based on digital technologies and cutting-edge tools such as blockchain, is an important goal for the future. “It’s about making sure it’s convenient for the public and businesses, and that it’s cost-effective and apolitical,” he said.

Ushakov said the goal this year is to enhance the role of BRICS in the international monetary and financial system. In the Johannesburg Declaration, member countries said they would increase payments in national currencies in 2023 and work to strengthen correspondent banking networks to secure international trade. A Kremlin aide said: “Work will continue to develop an emergency preparedness agreement, mainly regarding the use of currencies different from the US dollar.”

Russia has already raised the rate of use of its currency in mutual trade with friendly countries to 75% and is scheduled to host this year’s BRICS summit in the Russian region of Kazan this summer.

This is not a new common currency for BRICS, but an analogue of SWIFT for conducting transactions of national currencies in a digital format running on blockchain technology.

Apparently, this is expected to be integrated with digital versions of the ruble, renminbi, rupee, etc., and to be created in the near future as well.

Russia is accelerating plans for a digital currency that would operate outside the control of international regulators. The Central Bank of Russia (CBR) is working on the long-discussed creation of a central bank digital currency (CBDC), or digital ruble, which is expected to enter circulation in 2025.

According to the new law in 2023, the Central Bank of Russia will acquire the status of operator of the digital ruble platform. The regulator will also be responsible for the organization and round-the-clock operation of the platform, as well as the safety of the digital ruble in circulation.

CBDC is not a blockchain-based “coin” similar to those issued by other blockchain-based projects, but rather an electronic currency, as the CBR controls the issuance of tokens and is similarly supervised by a central bank. is. Just like fiat currencies are issued and regulated.

In preparation for the official launch of digital money, the CBR launched a digital ruble trial involving several commercial banks in August last year. The CBR also published a set of guidelines on digital currencies: “Digital ruble: what it is and how to use it”.

Olga Skorobogatova, First Deputy Governor of the Bank of Russia, said at a press conference at the start of the trial run that “we have been preparing for a long time for the start of actual transactions.” , banks, the opening of digital ruble wallets for customers (individuals and corporates), the testing of active transactions such as digital ruble transfers between customers, payments in trade and service businesses. ”