In a significant move for the BRICS alliance, President Vladimir Putin announced the bloc's official adoption of cryptocurrencies for investment purposes during the BRICS Business Forum held in Moscow. This initiative marks a pivotal shift in economic policy and anticipates the debut of the BRICS Pay platform.
On October 18, BRICS members—comprising Brazil, Russia, India, China, and South Africa—declared their embrace of cryptocurrencies, sparking excitement in the realms of international finance and investment. Putin characterized the announcement as a transformative step forward for the coalition, highlighting its potential to redefine economic interactions among the member nations.
The declaration arrives just days before the highly anticipated BRICS Summit 2024, scheduled for next week. The summit is expected to unveil various economic strategies, including the blockchain-based BRICS Pay system that aims to enhance cross-border financial transactions for the alliance.
During the forum, Putin underscored the significance of digital currencies for BRICS countries as well as other developing economies, stating, “We will review the utilization of digital currencies in investment initiatives by BRICS nations, which will also positively impact other emerging markets with promising futures.” He also indicated that a regulatory framework would be established under the oversight of BRICS institutions to ensure compliance and security.
As the BRICS bloc seeks to strengthen its economic influence, it has been actively working to diminish dependency on the US dollar within international trade, advocating for the use of local currencies among its members. This strategic decision follows Russia's recent policy shift that lifted its ban on the use of digital assets for international transactions, thereby opening up new avenues for engagement.
The forthcoming BRICS Pay platform is anticipated to serve as an essential mechanism for facilitating seamless cross-border transactions, thus reducing the bloc's reliance on Western financial infrastructures. Both Russia and China have been at the forefront of promoting this initiative, aiming to circumvent US sanctions and establish a more robust trading framework free from dollar dominance.
Putin acknowledged ongoing efforts among BRICS nations to establish a financial messaging system analogous to SWIFT and noted the utilization of national digital currencies to fund high-potential projects. This endeavor reflects a long-term strategy aimed at enhancing financial sovereignty and boosting intra-bloc trade.
Moreover, the Russian leader welcomed the expansion of BRICS to include new member nations such as Egypt, Ethiopia, Iran, and the UAE, with over 30 additional countries indicating interest in joining the alliance. The upcoming summit in Kazan will offer an opportunity to discuss potential new members further.
Expressing optimism for BRICS’ future role in global economic development, Putin highlighted the coalition's large and rapidly expanding economies compared to their Western counterparts. He also outlined Russia’s contributions to BRICS, which include new financial initiatives, such as a joint system for cross-border payments and the establishment of a reinsurance company.
In light of recent Western sanctions, Russia has accelerated the implementation of its digital currency strategy. In August, Putin enacted laws that legalized crypto mining and enabled international cryptocurrency transactions, allowing Russian enterprises to engage in cross-border digital payments. Furthermore, Russia's central bank is actively testing the digital ruble, with the full launch projected for 2025.
As BRICS member countries progress toward cryptocurrency integration, this initiative could profoundly influence the landscape of global finance, presenting new opportunities for investment and economic collaboration among its nations.
