INTERNATIONAL - Brazil, Russia, India, China and South Africa, a group of major emerging economies known as BRICS, back the idea of developing a common payment system, a Russian official said on Thursday.
Russia and its BRICS peers have been looking for ways to decrease their dependence on the U.S. dollar and have advocated using their national currencies in mutual trade.
Kirill Dmitriev, the head of the Russian Direct Investment Fund (RDIF), said “increasing non-market risks of the global payment infrastructure” was behind the plan to integrate the group’s national payment systems.
“An efficient BRICS payment system can encourage payments in national currencies and ensure sustainable payments and investments among our countries, which make up over 20% of the global inflow of foreign direct investment,” Dmitriev, a member of the BRICS Business Council, told reporters.
He did not give details about the payment system envisaged, but Russia began developing a national payment system as an alternative to the Belgium-based SWIFT financial messaging service in 2014 after Western sanctions were imposed on Moscow.
U.S. and other Western sanctions aimed to punish Russia for the annexation of Crimea and its role in the Ukrainian crisis.
Dmitriev said the five BRICS nations had also discussed creating a common cryptocurrency for mutual payments as the grouping was reducing the share of payments in the U.S. dollar.
The share of the dollar in Russian foreign trade payments has fallen to 50% from 92% over the past few years, while the rouble’s share has risen to 14% from 3%, he said.
Dmitriev did not say whether Russia supported the idea of the common BRICS cryptocurrency. Previously, Russian officials spoke against any cryptocurrencies, warning that they could be used in money laundering or financing terrorism.
The BRICS Business Council has also supported the Russian-backed initiative to create coordination centres for mutual investments within the BRICS bloc, Dmitriev said.