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The BRICS Cross-Border Payment Initiative (BCBPI) will use national currencies, instead of the US dollar. Russia’s finance ministry and central bank released a report detailing plans to transform the international monetary and financial system.
As the chair of BRICS for 2024, Russia proposed the creation of a BRICS Cross-Border Payment Initiative (BCBPI), in which members of the organization will use their national currencies to trade.
BRICS will likewise establish an alternative messaging infrastructure to circumvent the SWIFT system of interbank communication, which is overseen by the United States and subject to Western unilateral sanctions.
There are also plans for the establishment of a BRICS Grain Exchange and associated pricing agency, with centers for trade in commodities like grain, oil, natural gas, and gold, which can likewise be used to settle trade imbalances.
These proposals were outlined in the report “Improvement of the International Monetary and Financial System”, which was co-authored by the Ministry of Finance of the Russian Federation, the Bank of Russia, and the consulting firm Yakov and Partners.
In February 2024, the finance ministers and central bank governors of BRICS met in Sao Paulo, Brazil. There, the Russian representatives said they would prepare a report “for BRICS countries’ leaders with a list of initiatives and recommendations on ways to improve the international monetary and financial system”.
Russia’s Finance Minister Anton Siluanov explained the motivation:
“The current system is based on existing Western financial infrastructure and the use of reserve currencies. It is severely flawed and is increasingly used as a tool of political and economic pressure. Another reason for a reform of the international monetary and financial system is the geo-economic fragmentation that became a result of the abuse of trade and financial restrictions.”
The Russian BRICS chairmanship report argued that the international monetary and financial system (IMFS) is not only unjust but also inefficient, as it is a monopoly that suffers “from excessive reliance on a single currency and centralized financial infrastructure”.
The document noted that the “current IMFS is primarily serving interests of AEs” (advanced economies) – that is, largely the wealthy countries of the West.
As of 2023, the original five BRICS countries make up 32% of global GDP (measured at purchasing power parity, PPP), but have only 13.54% of voting shares in the IMF.
On the other hand, the G7 nations hold 41.27% of the voting shares in the IMF, despite the fact that they comprise just 30% of global GDP (PPP).
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Hope they’re successful for the sake of countries like Cuba, but I imagine this will take a long time to set up and work out the kinks.
Putting that trust in Russia, huh? We’ll see how that works out for you…
I mean it’s at least better than putting your trust in the US with the current system
Also this payment system wouldn’t be centralized in Russia or anything. Russia is just the one proposing it since they’re the host for 2024
Yes. The best projects are proposed by and supported by russia typically. Absolutely nothing glaringly wrong about Russia or its leadership at this point in history. /s
Stay away from open windows, friend.
Not so much Russia, as the rest of the world south, like Brazil, South Africa, or China. It’s about 50% of the world population in BRICS now. But it’s so varied, not sure if they’ll be able to figure something out.
So you see no major and ongoing problems with the leadership of the countries that you’re listing here that would give you pause in fundamentally shifting a world standard to something of their collective design?
I do, but the US and Western leadership of the world hasn’t exactly been roses, either. They’ve destabilized a country in essentially every region and continent except Australia and Antarctica. That’s why so much of the global south is trying to start another team. Not sure if it will work, but I can’t blame them for trying.
This would be an massive undertaking. I’d expect it to take decades before it starts getting any results.
i hope it doesnt. a dollar crisis will wipe us the fuck out.
The protocol isn’t even the issue, banks already use XRP.
It’s the fact that USD is propped up by Uncle Sam’s globalized monopoly which is kept in tip top shape by geopolitical power.
Everyone trades in USD because it’s the de facto currency and it’s stable because the government can abuse its power to keep it that way.
No one trusts the value of the Ruble, Yuan, Rupee, or even any other currency except for maybe the Euro. They all exist for internal use, which means its just gets compared in value to USD whenever you have to deal with anything external, which is all the time.
BRICS would only fly if a stable trade medium can rapidly prove its worth with market stress and trade requirement, otherwise everyone will just continue to use USD, hence why the USA doesn’t currently view it as much of a threat. And even if you could get countries on board, the US can hold on to a massive noose around everyone’s neck by refusing to trade in anything but USD, which would effectively shut you off from trading with a massive portion of US based/owned/partner companies.
I hope this saves the world economy if the US defaults on its debt, which is looking increasingly likely in the coming decades…
This should be fantastic for hackers, there’s new target(s) beside SWIFT.
If Swift could still be hacked, this payment needs to really ramp up their security processes pretty quick before some hacker steals money from itIt looks to be pushed by a few big countries who love to tamper with their monetary system which will be a big No No if they are part of the new system. This feels like a foot gun.
Can you elaborate? What tampering do you mean, what benefits does it provide, and why would the be lost because of this move?
China has intentionally printed and destroyed currency to maneuver themselves against other countries. It’s one thing where you modify rates to influence inflation and spending but extreme manhandling your financial system means you are not a stable system to base the world economy on. While any country could screw everyone over, its the fact they have already manipulated things that makes them scary.
This will take another 7 or 8 years to come to fruition.
I wonder what their actual goal is? Because actually posing a real, material threat to American economic hegemony results in your country experiencing regime change and people on forums a decade later arguing about whether you’re dead or in hiding with Elvis and Tupac.
Isn’t the first graph just general inflation? What does purchasing comparing purchasing power mean in this scenario? And how does it compare to other currencies like the pound or the euro?
Also the conclusion of the second article you linked seems to indicate that no other large scale currencies are replacing the shares of the US dollar, instead things like gold and diversified currencies are taking up this space, those don’t take the place for international trade.
Neither of these seem like a death knell for USD to me.
Cool. I can’t wait to accept 100 rubles just for it to be worth 50 rubles few days later. 🙄
You keep posting this graph with no context, but the euro has also had very high inflation.
This is bad faith and you know it, that’s why you aren’t actually discussing it, just posting a misleading graph.
USD had 141% cumulative inflation since 1990
Euro has 115%
The pound has 143%
Brazil ( a member of brics) has nearly 1000% since 1994 (25 million percent from 1990 like the other countries.
China, arguably the biggest contender for stability in brics has 160% inflation.
Why aren’t you including charts for all of these countries? And why are you using a chart showing inflation values from before USD was used as the international currency in 1944 with the bretton woods conference, without demonstrating why that is important and what it means? Given that this is in the context of global currencies.
