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Russia Pivot’s on Crypto as BRICS Momentum Builds
Crypto | Aug 28, 2024
Image: Freepik/wirestock
BRICS alternative payment system and Russia's transition to crypto signal's global finance pressure on US dollar
As reported by Bloomberg, Russia will formally start testing cryptocurrency exchanges on September 1, 2024, in an effort to promote international trade and avoid US sanctions. These experiments will use the National Payment Card System (NPCS) to convert rubles to cryptocurrency. Concurrently, the BRICS countries (Brazil, Russia, India, China, and South Africa) are looking at trade alternatives to the US dollar, and talks about using a single currency are growing. These changes could have a profound impact to cross border payments, and provide new options for countries seeking to sever ties with the banking system dominated by the West.
Alternative Financial Networks
Russia hopes to provide a quick fix through the NPCS for Russian companies that are having trouble doing business abroad given the growing limitations of its access to international financial networks such as SWIFT.
See:
BRICS Announces Launch of Blockchain Payment System
SWIFT Launching CBDC Solution Within 2 Years (to Compete with BRICS)
At the same time, BRICS nations are discussing the possibility of establishing a single currency for commerce payments within their bloc. According to Cryptopolitan, On August 14, Russia's Finance Minister Anton Siluanov said that the administration is still working out the details of legalizing cryptocurrency exchanges, stating:
"As of yet, we have not discovered a way to accomplish this."
While creating a BRICS currency is still a long ways off, Russia is looking to support cross-border payments with crypto as a stopgap measure. As BRICS momentum grows, it highlights how international economies are looking for alternatives to reliance on the US dollar and those that control it.
Why It Matters
Russia's decision to proceed with crypto trials is a direct response to economic sanctions and aligned with BRICS' discussions on alternative financial systems. If these initiatives are successful, they may quicken adoption of crypto for cross border payments and transform trade between BRICS countries and the rest of the world.
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