In the evolving landscape of international finance, recent developments highlight a strategic shift towards alternative payment systems. The 2024 BRICS Summit marked a significant step in this direction, with member nations collaborating to reduce reliance on traditional dollar-dominated frameworks. While the summit’s official declarations focused on broader financial cooperation, subsequent discussions have emphasized the potential role of digital assets in achieving these goals.
BRICS Nations Endorse a Shared Cross-Border Payment System
The 2024 BRICS Summit, held in Kazan, Russia, from October 22–24, was the first gathering since the bloc expanded to nine members earlier in the year. A key outcome was the collective endorsement of a joint cross-border payment system, designed to facilitate trade outside the conventional dollar-based system.
Russian President Vladimir Putin, addressing the attendees, emphasized the growing influence of BRICS in the global economy and criticized unilateral sanctions imposed by Western nations. The proposed payment system aims to mitigate the impact of these sanctions and promote financial sovereignty among member states.
Brazilian President Luiz Inácio Lula da Silva, participating via video call, echoed the urgency for creating alternative payment mechanisms. He also highlighted the role of the New Development Bank (NDB) as a potential substitute for Western-led financial institutions like the International Monetary Fund (IMF) and the World Bank.
Cryptocurrency Not Explicitly Mentioned in Official Statements
Despite speculation, the summit’s joint declaration, known as the Kazan Declaration, did not explicitly reference plans for a common BRICS currency or the use of cryptocurrencies. Instead, it emphasized the use of local currencies in financial transactions between BRICS members and their trade partners.
President Putin had previously revealed that 95% of Russia’s trade with other countries is already settled in national currencies. While he described efforts towards a unified BRICS currency as premature, he suggested that digital currencies could play a role in investment settlements among member nations.
Russian Legislators Promote Crypto in Trade and Mining
Beyond the summit, Russian lawmakers are actively advocating for the integration of cryptocurrencies into the country’s trade strategy. One proposal involves local mining companies selling Bitcoin to international buyers, who could then use it to pay for Russian exports. This approach would effectively circumvent Western sanctions and support the use of digital assets in cross-border transactions.
In a significant move, BitRiver—Russia’s largest crypto mining and data center operator—announced a partnership with the Russian Direct Investment Fund (RDIF) to build mining and AI data centers within BRICS nations. The collaboration aims to expand Russia’s share in the global computing power market.
These initiatives follow recent legislative changes in Russia, including the legalization of cryptocurrency mining and the formal approval of crypto use in cross-border trade as of September 1, 2024. Together, they signal a strategic pivot towards embracing digital currencies as tools for economic resilience and de-dollarization.
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Frequently Asked Questions
What was the main financial outcome of the 2024 BRICS Summit?
BRICS members agreed to develop a shared cross-border payment system to reduce dependence on the dollar-dominated financial system. The focus was on using local currencies for trade, though digital assets were not explicitly mentioned in the official declaration.
How is Russia promoting the use of Bitcoin in international trade?
Russian lawmakers are encouraging mining companies to sell Bitcoin to international buyers, who can then use it to pay for imports. This method helps bypass Western sanctions and aligns with the country’s broader de-dollarization goals.
Did the BRICS Summit discuss a common currency?
No, the summit did not announce plans for a common BRICS currency. President Putin stated that the idea was premature but suggested that digital currencies could be used for investment settlements among member nations.
What recent legal changes support crypto in Russia?
Russia legalized cryptocurrency mining in August 2024 and began allowing the use of digital assets in cross-border transactions starting September 1, 2024. These changes reflect a shift towards leveraging crypto for trade and sanctions evasion.
How are Russian companies contributing to crypto mining expansion?
BitRiver, in partnership with RDIF, is developing large-scale data centers in BRICS countries for crypto mining and AI applications. This initiative aims to strengthen Russia’s position in the global computing power market.
Why is de-dollarization significant for BRICS nations?
De-dollarization reduces reliance on the U.S. financial system and minimizes vulnerability to Western sanctions. It promotes financial independence and allows countries to conduct trade using alternative currencies or digital assets.