BRICS Pay Propels Half the World into Dedollarization
If you don’t already realize that dedollarization is happening, there’s no clearer proof than BRICS Pay. BRICS Pay is a new blockchain-based payment system that enables members of the BRICS countries (Brazil, Russia, India, China, and South Africa) and their partners to make financial transactions in a whole new way.
Prior to BRICS Pay, residents of these countries had limited choices in how they would make purchases, trade and take loans from outside their country. The dollar has been the overwhelming choice for international trade for decades, serving as the primary medium of exchange for international transactions. That’s been a problem for countries who have faced sanctions on SWIFT, the international bank transaction platform owned by the Western economic bloc.
Removing the potential barriers created by SWIFT has been a driving factor in the progression of BRICS Pay, with the dollar gradually sliding into the backseat of global trade as a result.
The adoption of BRICS Pay across member states and partnered institutions has been rapid and dramatic. One of the largest banks in Russia, Sberbank, has already integrated BRICS Pay, as has the Bank of China and the State Bank of India. But it’s not just the players you might expect – it’s also Standard Chartered bank in the UK, e-commerce giant Alibaba, and Brazilian retail company Petrobas, along with dozens of others. Mobile apps enabling BRICS Pay are popping up on phones all over the world every second.
With that said, it’s clear that it’s not just BRICS constituents (representing 42% of the world’s population) who are adopting the new payment system, it’s everyone who wants to do business with them, too.
But what is BRICS Pay, exactly? In its simplest form, it represents an incredibly easy and fast way to make a payment, regardless of whether you’re using yuan or rubles. For a BRICS resident to make a purchase from a vendor who is also part of the BRICS Pay network – either in person as a tourist or online from the comfort of your home – you need only sign into the app and make the transfer. There’s no need to initiate a complicated and costly currency exchange, nor will you face any delays in transferring the funds (unlike in existing systems).
BRICS Pay is managed by the BRICS-established New Development Bank (NDB), which itself has a growing presence in member countries around the world. The BRICS NDB is helping to facilitate the establishment of common technological infrastructure between member states to ensure that BRICS Pay can be used everywhere.
Once BRICS Pay takes full flight, it will contribute to increased trade among BRICS nations, enable easier cross border payments, provide a seamless platform for investing in foreign companies, and create new pathways for microtransactions and interpersonal loans. Tourism between BRICS countries will be an added benefit owing to the ease of payment.
All of that economic activity will be taking place outside the umbrella of the dollar, serving to indicate just how much BRICS is engaged in dedollarization – and how quickly the tables can turn on the world currency standard, particularly with the dollar’s depreciation continuing unchecked.brics, digital currency, Featured