Russia is gearing up to present a new idea for a blockchain-based international payment system at the upcoming BRICS summit. This system, aimed at bypassing Western sanctions and reducing reliance on the U.S. dollar, is expected to take center stage when BRICS leaders meet in Kazan from October 22-24.
According to documents prepared by Russia’s finance ministry and central bank, the proposed system would connect commercial banks from BRICS countries through their central banks. Using blockchain technology, it would allow national currencies to be securely transferred via digital tokens, making transactions easier without needing U.S. dollars.
Russia sees this as a way to tackle ongoing trade payment challenges, even with countries like China, where banks worry about U.S. sanctions.
Yaroslav Lissovolik, founder of the BRICS+ Analytics think tank, noted that while this system is technically possible, it could take time to put into place. “After the significant expansion of BRICS membership last year, the attainment of consensus is arguably harder,” he said.
In addition to the payment system, Russia is pushing for a broader shakeup of global financial institutions, accusing bodies like the International Monetary Fund (IMF) of prioritizing Western interests. Recently, Russian Finance Minister Anton Siluanov called on BRICS to consider creating an alternative to the IMF, better suited to meet the needs of emerging economies.
Among other proposals, Russia has suggested setting up a “BRICS Clear” platform for securities trading and improving communication between the credit rating agencies in BRICS countries. However, the idea of a joint BRICS credit rating agency, which has been discussed in the past, wasn’t included in the latest proposal.
As the world’s largest wheat exporter, Russia is also advocating for the creation of a BRICS grain trading exchange. This would be supported by a pricing agency to offer an alternative to Western-dominated commodity markets.
Despite these ambitious ideas, Russia may face challenges in getting full backing from all BRICS members. At last week’s preparatory meeting, most countries sent lower-level officials rather than top finance ministers or central bank representatives, hinting that not everyone is fully onboard yet.
For the summit, Russia expects leaders from all nine BRICS members, along with delegates from about 15 other countries interested in collaborating with the group. Saudi Arabia, which has been invited to explore closer ties with BRICS, will also send its foreign minister.
“BRICS is a structure that cannot be ignored,” Kremlin aide Yuri Ushakov told reporters last week.
This proposal comes at a time when BRICS has expanded to include new members Egypt, Ethiopia, Iran, and the UAE, alongside founding members Brazil, Russia, India, China, and South Africa. Moscow hopes this growing group will be a stronger counterbalance to Western financial systems.
