The BRICS alliance, consisting of Brazil, Russia, India, China, and South Africa, is reportedly exploring the creation of a global payments system that would bypass the traditional banking standard SWIFT. The finance ministers of the group are evaluating the feasibility of a unified payments network, which will be discussed at the upcoming BRICS meeting next year. The potential system aims to support independent efforts in developing payment messaging systems, such as Russia’s SPFS and China’s own system. This move comes after BRICS formally decided to expand its membership to include Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the UAE. Russian Finance Minister Anton Siluanov highlighted the bloc’s focus on reducing dependence on the West and expanding ties with Southeast nations.
SWIFT, a widely-used messaging system for banks, is an integral part of the global banking system. Earlier this year, SWIFT banned several Russian banks at the request of the European Union. In August, South Africa’s finance minister stated that a BRICS-based payments system would aim to strengthen trade in local currencies, rather than relying on the US dollar. However, he acknowledged the challenges in implementing such a system and clarified that it is not intended to directly challenge SWIFT.
The establishment of a global payments system by BRICS could have significant implications for the international financial landscape. By bypassing SWIFT, member countries could enhance their financial independence and reduce reliance on traditional banking channels. This move aligns with BRICS’s goal of promoting greater economic cooperation among its members and expanding its influence beyond the Western-dominated financial system. However, implementing this system and ensuring its compatibility with existing infrastructure will pose challenges. The discussions on the potential payments network at the upcoming BRICS meeting will shed more light on its feasibility and potential impact on global financial transactions.