BRICS member Russia confirmed that the country is building an alternative to the SWIFT payment system without integrating the US dollar. The new payment mechanism will settle cross-border transactions in local currencies making BRICS and other developing countries sideline the US dollar.
Watcher Guru had recently reported that 20 countries are already on board to initiate transactions in local currencies when Russia’s new payment system is out. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.
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BRICS: Russia Plans To Pitch New Payment System To 159 Countries
In the latest update, Russia, with the help of BRICS, is planning to pitch the new payment system to over 159 countries around the world. The 159 countries hail from the global south, Asia, Africa, and Latin America, and include other developing countries globally.
Russia plans to pitch the new payment mechanism to the majority of the world when it is ready for launch. The BRICS country Russia is currently working on the payment system touting it to be an alternative to SWIFT.
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Once Russia sends the pitch to 159 countries, the decision to join or reject the payment system will be taken. Developing countries will then evaluate its pros and cons and conclude its prospects. BRICS and Russia will allow developing nations to decide on the use of local currencies for trade or the US dollar.
Whether the majority of the 159 countries will reject Russia’s new payment system or accept it, only time will tell. The move puts BRICS and other developing countries in charge of deciding the fate of the US dollar.
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“Russia has a System for Transmitting Financial Messages (SPFS), which is an alternative to SWIFT. Similar infrastructure exists in some other countries. We are holding discussions on the interaction of such platforms, but here the interest and technical readiness of our partners are important,” said Russia’s Central Bank Governor Elvira Nabiullina to Xinhua News Agency.
The governor also added that over 159 foreign participants will get to know the nuances of the payment system when it is ready. Therefore, SWIFT and the US dollar could soon face stiff competition from Russia and the BRICS alliance.