BRICS member Russia is pitching a new idea of a ‘multicurrency payment system’ option to break the US dollar dominance. Russia is proposing changes to cross-border transactions where all currencies of existing members will be used to settle trade. The move will bolster local currencies of member nations leading to lesser dependency on the US dollar.
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The new BRICS multicurrency payment system will be a ring of all currencies and become a center for mutual trade. The main agenda is to circumvent the Western financial powers and usher into a new era of global authority. Russia is pitching the multicurrency system to sanction-proof its economy and that of the existing members of the alliance.
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BRICS: Russia Wants ‘Multicurrency System’ To Challenge US Dollar Hegemony
Source: DIRCO/GovernmentZA)
Russia wants the new BRICS multicurrency payment system to be an alternative option to the US dollar. The “multicurrency system” will need to “ring-fence its participants from any external pressures such as extraterritorial sanctions,” read the report prepared by the Russian Finance Ministry, the Bank of Russia, and Moscow-based consultancy Yakov & Partners.
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The report also read that the US interests “are not always aligned with the interests of other participants.” Russia will discuss the report and pitch the idea of a multicurrency system at the upcoming BRICS summit. The idea could find takers from China and Iran as the two countries are eager to end reliance on the US dollar.
The other BRICS members, especially India, South Africa, and the UAE might find the idea of a multicurrency payment system to be a desperate move from Russia. India recently made its stance clear that it has no plans of de-dollarization and fully embraces the US dollar. On the other hand, the UAE needs the US dollar as it boasts of global cities and needs the currency for its survival.
In conclusion, Russia’s pitch for a multicurrency payment system at the upcoming BRICS summit could fail to get takers. The 16th summit is scheduled to take place on October 22 to 24 in the Kazan region of Russia.
