The BRICS nations are on a steadfast march to ditch the US dollar in favor of their own cryptocurrency for international trade. Anatoly Aksakov, Chairman of the Russian State Duma Committee on the Financial Market, revealed this ambitious shift, noting that the bloc is keen on replacing traditional fiat currencies with digital assets for cross-border transactions.
From Dollar to Blockchain
BRICS, which now includes Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates, has a well-documented strategy of de-dollarization that aligns with the promotion of local currencies. This strategy has been significantly boosted by the introduction of the BRICS Pay system, marking a pivotal moment in their quest for a dollar-independent future.
Over the past year, the expanded alliance has not only welcomed new members but has also deepened its commitment to using local currencies in unilateral trade dealings. At the 2023 annual summit, this expansion was highlighted as a major step towards fostering a multipolar world order. The focus now intensifies on phasing out the dollar, with the bloc actively working to replace it with cryptocurrency in all international trade.
Russia’s voice has been particularly prominent, describing the initiative as a “serious channel to replace fiat currencies in international transactions.” This move is underpinned by the bloc’s dedication to developing Central Bank Digital Currencies (CBDCs), which they intend to use as a direct substitute for fiat money. Meanwhile, the U.S. has voiced strong opposition to similar projects in the West, setting the stage for a clash of financial titans.
Uniting Financial Systems: The BRICS Bridge Initiative
Further developments have been spearheaded by Russian Deputy Foreign Minister Sergey Ryabkov, who discussed the creation of new financial platforms that would support the increased presence of digital assets rather than traditional fiat options. These platforms, Ryabkov explained, would unite the financial systems of the BRICS countries through what he termed the “BRICS Bridge.” This initiative will likely use stablecoins and other cryptocurrencies, providing a structured path for the bloc to accelerate its de-dollarization efforts.
However, the absence of the US dollar in these dealings could raise concerns among global traders and nations currently integrated deeply with the dollar-based financial system. Nevertheless, the ten BRICS nations appear resolute in their strategy.
In addition to these financial maneuvers, the original five-nation group of BRICS has been working diligently on a blockchain and digital technology-based payment system, as reported by the Russian news agency TASS. Kremlin aide Yury Ushakov emphasized the importance of this independent payment system, stating it should be “convenient for governments, common people, and businesses, cost-effective, and free of politics.”
This initiative is part of a broader agenda to elevate the role of BRICS within the international monetary system, continuing efforts to diminish the use of the U.S. dollar in settlements—a strategy Ushakov affirmed will persist with the development of the Contingent Reserve Arrangement focusing on alternative currencies.
Adding to the financial narrative, last month’s TASS report highlighted a collaborative effort by Russia’s Finance Ministry, the Bank of Russia, and BRICS partners to establish the BRICS Bridge as a multisided payment platform aimed at enhancing the global monetary system. Furthermore, Klaas Knot, Chair of the Financial Stability Board, has signaled to G20 finance ministers that crypto assets, tokenization, and AI are top priorities, underscoring the growing emphasis on digital solutions in global finance.
