Russia Proposes BRICS Payment System to Circumvent Western Sanctions

As Russia faces unprecedented Western sanctions amid the Ukraine conflict, it is proposing a new financial system for the BRICS nations aimed at bypassing the global financial network dominated by the US dollar, Bloomberg reports.

The plan, detailed in a report by the Russian Finance Ministry, Bank of Russia, and consultancy Yakov & Partners, outlines a “multicurrency system” that would enable transactions in local currencies and shield participants from external pressures like sanctions.

The proposed system would include a network of commercial banks, direct links between central banks, and the creation of trade centers for commodities such as oil, natural gas, grain, and gold. Russia also suggests utilizing distributed ledger technology (DLT) or a new multinational platform for token-based settlements, arguing that it could reduce processing times and costs by up to $15 billion annually for BRICS countries.

The initiative comes ahead of the annual BRICS summit, scheduled for October 22-24 in Kazan, Russia. This year’s summit will see the participation of expanded BRICS membership, including Iran, the UAE, Ethiopia, and Egypt.