BRICS Proposed Payment System Might Use Digital Assets as Currencies

The new payment system proposed at the BRICS summit held in Kazan will be multicurrency and will allow a higher integration level of digital financial assets with traditional networks.

Russia's Finance Minister provided details on the BRICS payment system during the recent summit in Kazan. The system will reportedly be able to handle digital financial assets and financial messages.

The BRICS nations, which include Brazil, Russia, India, China, and South Africa, are discussing the creation of a new payment system that will facilitate transactions in multiple currencies. This system is also designed to integrate digital financial assets with traditional networks.

At the sidelines of the BRICS organization summit in Kazan, which also saw the participation of Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates, Russian Finance Minister Anton Siluanov stated that the new payment system will combine banking functions with a financial messaging system.

“This payment system will allow the replacement of banking organizations on one hand. On the other hand, it will include a system for transmitting financial messages,” Siluanov explained.

Siluanov's statements suggest that the new payment network will be similar to the Society for Worldwide Interbank Financial Telecommunications (SWIFT), which serves as the primary financial messaging system for cross-border payments.

However, Siluanov highlighted that this new system will go a step further by incorporating digital financial assets (DFA) into its operations.

“This system is planned on new formats, and approaches, taking into account the use of digital financial assets. This is a new system design,” he emphasized.

SWIFT, on the other hand, is also exploring the addition of digital asset messaging capabilities to its global payment network. In September, the organization announced that this feature was still in the testing phase, with a focus on integrating central bank digital currencies into its network.

In March, President Putin signed a legislation that prohibits the use of digital assets for domestic payments but allows for their application in international settlements. DFA assets encompass a broad range of instruments, including tokenized metals and central bank digital currencies.

According to Siluanov, the creation of this system is crucial for the BRICS bloc, especially considering the recent politicization of the existing messaging system, which became a key topic of discussion at the BRIS summit.