Russian President Vladimir Putin has called for the BRICS nations to develop a cross-border payment system similar to SWIFT that would be immune to Western sanctions. He also urged the use of national digital currencies in financing investment projects, as part of an effort to reduce reliance on the US dollar.
Speaking ahead of the 16th annual BRICS summit, which will be hosted by Russia, Putin emphasized that the time is not yet right for a common BRICS currency. However, he confirmed that the 10-member bloc is actively exploring the use of digital currencies, with Russia working closely with India and other nations on this initiative. Russia, which has faced significant sanctions from the US and its allies following the 2022 conflict with Ukraine, is keen to bypass the existing global financial system. To achieve this, it is pushing for a new payment network linking commercial banks through BRICS central banks.
Putin advocated a cautious approach to creating a new reserve currency, highlighting the structural differences among BRICS economies. He suggested that the focus should be on expanding the use of national currencies, developing new financial instruments, and creating an alternative to SWIFT. Prime Minister Narendra Modi will attend the summit, which will take place on October 22-23 in Kazan, Russia. The summit is the first to include BRICS' expanded membership, with Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE joining Brazil, Russia, India, China, and South Africa.
Addressing the possibility of a BRICS reserve currency, Putin stressed the need for gradual development. He warned against rushing into a single currency without ensuring economic compatibility among the member states, citing the challenges faced by the European Union when it introduced the euro. Putin also highlighted the need to strengthen relationships between central banks and ensure reliable, independent financial information exchange. He pointed to the creation of a SWIFT-like system within BRICS as a potential solution.
Russia has already been working with other BRICS nations on a SWIFT alternative and is also exploring the use of national digital currencies to fund high-growth investment projects. In addition, the bloc is preparing to launch BRICS Pay, a blockchain-based payment platform designed to facilitate cross-border transactions within the alliance. Putin noted that these initiatives are part of a broader strategy to reduce reliance on the US dollar, which has been declining in global reserves and trade. He argued that US sanctions have strained relations and triggered a global reassessment of the dollar's dominance.
While countries like Russia and China are pushing for a shift away from the dollar, India has clarified that it is not part of any de-dollarization agenda. External Affairs Minister S Jaishankar recently stated that India will continue to use the US dollar where it is accepted and does not intend to target it. With the inclusion of new members, BRICS has solidified its status as a major economic bloc, now representing half of the global population, 38 percent of the world's GDP, and 40 percent of global trade.