BRICS members Russia and Iran could officially ditch the US dollar for all trade and commerce transactions among each other. Russia and Iran are in the process of finalizing a new national payment integration system that will allow both countries to settle trade in local currencies and officially do away with the US dollar. Once the national payment system is integrated, the two countries will pay the Russian ruble and Iranian rial on a mutual understanding for trade deals.
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The development aligns with the BRICS idea of de-dollarization where local currencies thrive and not the US dollar. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.
BRICS: National Payment System On The Cards For Iran & Russia, US Dollar Finds No Place
The two BRICS members will integrate their respective payment mechanisms for smoother transactions in local currencies. The Russian Mir payment system will be integrated with the Iranian Shetab mechanism. The new payment integration will allow Iranian Shetab cardholders to withdraw rubles from ATMs across Russia and vice versa. The move will usher into a new era of financial trade by BRICS countries without needing the US dollar.
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“During the meeting, the two sides finalized the requirements to connect Russia’s Mir payment system to Iran’s Shetab and this project has entered the operational phase,” said the Governor of the Central Bank of Iran, Mohammad Reza Farzin. While the first stage is almost complete, the second stage is in the works, he confirmed. “The second stage (involves the possibility of) paying with Russian citizens’ cards in Iran,” he said.
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Iran is a new member of BRICS and was inducted into the bloc along with the UAE, Egypt, and Ethiopia. The 16th summit is scheduled to be held in October this year in the Kazan region of Russia. De-dollarization initiatives could be taken at the next summit as BRICS plans to keep the US dollar on the backseat.