A new financial system proposed by Russia is reported to bypass dollar transactions in international payments.
Russia is set to present its project for a new international financial system to fellow BRICS nations at the group’s summit next week, according to Reuters, which cites a document distributed by Moscow to journalists ahead of the event.
The proposed system is believed to be immune to Western sanctions and could potentially end US dollar dominance in international exchanges and transactions, the news agency said. The report suggests that the new payment platform utilizes blockchain technology and relies on digital tokens backed by the national currencies of participating countries.
This format would facilitate easy and secure exchange of such currencies without the need for dollar transactions. The new platform reportedly also leverages a network of commercial banks connected to each other through the central banks of BRICS countries.
The proposal is said to include the creation of a ‘BRICS Clear’ platform for settling trade in securities. It also encourages member states to develop a common rating methodology but does not mention creating a joint BRICS rating agency. The document reportedly also accuses existing international financial institutions, including the International Monetary Fund, of serving the interests of the US and its allies.
Moscow has not commented on the Reuters report and has not publicly released any documents such as the one mentioned in it. Last week, Russian Finance Minister Anton Siluanov presented a proposal on international financial system reform to other finance ministers and central bank heads of the BRICS nations.
On that occasion he also criticized the West for attempting to use the international financial system and the US dollar as a means of political pressure. According to Siluanov, BRICS had been discussing alternatives to the Western-dominated global payment system, settlement depository, and ratings-agency regime.
The minister also stated that new financial digital assets should be used in international payments. “It is faster, cheaper and more reliable. Operations are conducted without the involvement of the banks and infrastructure of third countries,” he explained. However, specific details of the proposal remain unclear.
Russia has been actively reducing the use of dollars in its international transactions. Over 95% of mutual settlements between Russia and its largest trading partner, China, are conducted using national currencies (the ruble and yuan), according to Russian Prime Minister Mikhail Mishustin in August.
Siluanov stated that the BRICS countries would further reduce the share of the US dollar in mutual transactions in favor of national currencies.
The BRICS summit is scheduled to be held in Kazan, southwest Russia next week. Moscow currently chairs the organization, which includes Brazil, India, China and South Africa, as well as Egypt, Iran, the United Arab Emirates and Ethiopia. More than 30 nations, including NATO member Türkiye, have applied to join the economic bloc, according to Russian officials.