The introduction of cryptocurrencies was one of the key discussions among BRICS member states at a business forum held in Moscow on Friday.
The BRICS (Brazil, Russia, India, China and South Africa) bloc is seeking to reduce its dependence on the Western financial system by introducing an alternative payment system to the SWIFT payment network.
Encourages adoption of digital currency
During the forum, Russian President Vladimir Putin urged BRICS member states to introduce cryptocurrencies and other digital currencies in financial transactions to reduce dependence on the US dollar.
President Putin said he believed BRICS and other developing countries could benefit from adopting digital currencies and would encourage the economic bloc to explore this possibility.
JUST IN: BRICS will use digital currency for investment development. pic.twitter.com/i7u7JFsC55
— BRICS News (@BRICSinfo) October 18, 2024
He said BRICS countries would discuss the use of digital currencies in investment development, adding that it would not only be BRICS countries that would benefit from the introduction of cryptocurrencies, but “other developing and emerging countries as well.” added.
However, he recognized that before committing to the adoption of cryptocurrencies in earnest, comprehensive regulation must first be established, stressing the importance of building a strong framework for governing BRICS countries.
Cryptocurrency adoption is on the rise
Digital currencies such as cryptocurrencies can be used to bypass traditional banking systems and are being adopted by a growing number of countries.
Some countries have adopted digital versions of their national currencies, so-called central bank digital currencies (CBDCs). CBDCs are typically issued and regulated by central banks.
BRICS members Russia and China are already considering the use of digital currencies.
Russia has announced that it will begin pilot testing a digital ruble next July. In the pilot implementation, selected individuals and companies will participate in the experiment and make purchases using digital rubles.
Meanwhile, China has made significant progress in this field through Digital Currency Electronic Payments (DCEP). DCEP, also known as e-CNY, is a digital money launched by the Chinese government and currently operated by the Central Bank of China. This is China's response to the public's demand for modern payment solutions.
As of the end of 2021, approximately 261 million personal wallets had been opened through this initiative, and transactions worth CNY 87.565 billion had been made.
Launch of BRICS Pay
Apart from digital currencies, BRICS has presented a new payment platform that challenges the SWIFT financial system.
Member countries have officially announced BRICS Pay. This is considered a milestone that will revolutionize financial transactions between BRICS member countries. The blockchain platform streamlines cross-border transactions within the block, serves as an alternative to SWIFT, and circumvents US sanctions.
Furthermore, BRICS Pay reflects the bloc's member states' desire to establish an autonomous economic framework free from the domination of traditional power structures.
Featured image from Moscow TimesTradingView chart
