The launch of Brics Paythe new payment system of the Brics countries, marks a further step forward towards the consolidation of the alliance of the Brics+ countries. Brics Pay was designed as alternative to circuits dominated by the dollar and aims to guarantee greater economic sovereignty to the members of the group. According to some commentators, it could also have an influence on the euro and theEuropean economy. This initiative is part of a larger one de-dollarization strategy to mitigate the power of Western sanctions and strengthen commercial ties between emerging economies, themes at the center of the Summit held in recent days.
Brics Pay challenges the supremacy of the dollar
At a time of growing tension between the Western bloc and the Brics countries, Brics Pay was born with the aim of reduce global dependence on the dollar in international transactions, offering an alternative payment network capable of bypassing systems such as SWIFT.
During the recent Kazan summit, the Brics leaders launched the Kazan Declarationwhich calls for the elimination of “unilateral economic sanctions” to limit damage to the world economy. The declaration also calls for the creation of a independent payment systembased on the national currencies of member countries, to counter US sanctions.
To give a tangible signal of the system, representatives of the summit distributed promotional Brics Pay cards, loaded with 500 rubles and ready for use during the event.
How it works and who will benefit from it
The Brics Pay system stands out for its decentralized architecture which uses a “subgraph” network within each member country. In each nation, local settlement banks handle transactions that can connect directly to foreign banks or financial institutions in other BRICS countries, ensuring fast and secure transactions in national currencies. This is a distributed and guaranteed approach scalability and high speedfundamental elements for adoption by emerging economies such as those of Brics.
The system could prove particularly advantageous for African countries, often penalized by high exchange rates and international transaction costs. Countries such as South Africa, Egypt and Ethiopia could therefore benefit from an instrument that lowers barriers to international trade, facilitating payments between members of the BRICS alliance.
The impact globally and on the euro
Brics Pay represents much more than an alternative to existing financial circuits: it is a potential one revolution in the global financial order. China, a key supporter of the project, sees Brics Pay as a way to strengthen its financial position and ensure stability in the event of future sanctions. During the Kazan summit, Xi Jinping insisted on the need for “connectivity” between the infrastructures of the Brics countries and on the importance of New Development Bank as an alternative to Western institutions.
For Europe, which continues to depend on SWIFT for most international transactions, Brics Pay could represent a new challenge. As emerging countries develop autonomous circuits for transactions in local currencies, the euro could find itself competing in an increasingly fragmented market. The growing influence of the Brics and their plan for an international currency backed by assets such as gold could contribute to strengthen the bloc’s economic independence and to reduce the use of the dollar and euro as reference currencies.
