In a significant move towards financial independence, the BRICS alliance is advocating for the establishment of a payment system similar to SWIFT, aimed at countering U.S. dollar dominance. Russian President Vladimir Putin has been a vocal supporter of this initiative, emphasizing the need for a parallel system that would facilitate transactions among BRICS nations without reliance on Western financial institutions. This proposal is part of a broader strategy to enhance economic cooperation among member countries, which now include new entrants such as Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE, collectively representing 50% of the world population and accounting for 38% of global GDP and 40% of global trade. [d8a412af]
The BRICS nations are also exploring the use of digital currencies and national currencies for investment projects, with discussions around a common BRICS currency being approached gradually. Babakov, Deputy Chairman of the Russian State Duma, previously highlighted the necessity of creating a BRICS SWIFT counterpart to provide an alternative to the current system dominated by Western banks. He noted that this new system would need to ensure high-level security and data protection while being compatible with existing financial frameworks. [e9936652]
The upcoming BRICS summit, scheduled for October 22-23, 2024, in Kazan, Russia, will further address these financial strategies. However, it's important to note that India has expressed a cautious stance, maintaining its reliance on the U.S. dollar and opposing the broader de-dollarization agenda. This reflects the complexities within the alliance as members navigate their individual economic interests while striving for collective financial autonomy. [d8a412af]