Amid the alliance's continued efforts to SWIFT alternativethe economic alliance has tried to create its own BRICS payment system. It will play an important role in the alliance's trade transactions. In particular, by allowing unilateral settlement without the need for the US dollar.
The move is vital for the bloc and its participating countries, and it looks like there will be a lot of them. According to a Russian official, there are currently 159 countries that want to adopt the system. With a possible launch in October, it could have huge implications for the global market.
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Countries flock to BRICS payment system as SWIFT opposition emerges
In recent years, the BRICS alliance has committed to enhanced dedollarization efforts. With the impact of Western sanctions on Russia, the move is a clear promotion of local currencies and alternative settlement methods. While many have been skeptical, its popularity so far is undeniable.
According to the governor of the Russian Central Bank, Elvira Nabiullina159 countries are set to adopt the BRICS payment system when it goes live. These foreign participants are indeed looking to explore an extension of the Russian System for Transmitting Financial Messages (SPFS) platform.
Nabiullina said the system is “an alternative to SWIFT.” Moreover, she added, “similar infrastructure exists in some other countries. We are having discussions about the interaction of such platforms, but here the interest and technical readiness of our partners are important.”
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The payment system has become increasingly important for the alliance. The mechanism is a priority of the upcoming BRICS 2024 summit, the head of Russia's BRICS Presidency Council said, Victoria Panova.
“Active efforts are being made to create a financial payment mechanism that would facilitate cooperation among BRICS countries, and preserve their sovereign trade and economic exchanges,” she said. “This issue is at the top of the agenda because every member of the group considers it important,” she added.
The introduction of the system should generate immediate activity. Furthermore, it could open the door to extensive trade agreements for the alliance. With a plethora of countries wanting to join, they could choose to embrace the system when it is launched. At this point, there is a chance that it will be ready for the crucial October summit.