BRICS Pay: Will it really change the way trade is done?

By Rhod Mackenzie

Amidst the frequent geopolitical and economic changes, important details are often overlooked. In recent weeks, the BRICS alliance has been steadily growing. Despite scepticism, the Belt & Road forum has yielded clear, goal-driven results. However, one aspect that is not receiving enough recognition is the steady progress of the Brics Pay platform, which some have previously dismissed as a financial 'pipe dream'. According to InfoBRICS, significant progress has been made.

Brics Pay has even released a video demonstrating the purchase of a bottle of South African wine in a Moscow store using the mobile Brics Pay app.

It seems that Brics Pay has been launched as a new financial settlement platform. It is expected to facilitate trade and financial transactions between BRICS members by simplifying payments.

The original BRICS group comprises Brazil, Russia, India, China, and South Africa. Starting from January next year, Argentina and five influential MENA countries, namely Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE, are expected to join the group.

However, payments and transactions will not be conducted in US Dollars. Instead, the BRICS members are committed to de-dollarization and using their respective national currencies. The introduction of the new Brics Pay system is likely to expedite this process.
The Brics Pay system is based on blockchain technology, which operates on a distributed ledger. It is not a central bank digital currency (CBDC) or a cryptocurrency. Instead, it is designed as a digital service that accepts any of the BRICS member currencies. The primary objective is to facilitate trade and financial transactions among the BRICS nations by circumventing the use of the US dollar and Euro, and decreasing reliance on Western financial systems like SWIFT.

Currently, two BRICS members, Russia and Iran, have already been disconnected from the SWIFT network and had their overseas financial assets frozen. There have also been occasional threats to do the same to other members, including China. The urgency to develop an alternative system has increased due to the need to prepare for potential political and financial sanctions in the future.

Brics Pay aims to replace SWIFT's functionality and give member countries control over their finances. This will prevent any third-party actors from interfering with global financial transaction networks or seizing financial assets.
Brics Pay serves several main purposes, including facilitating international trade, cross-border payments between companies, investments, and microfinance. This blockchain-based system is a major step towards making trade between member countries easy, seamless, and real-time. The new system demonstrates the BRICS nations' commitment to moving away from the United States dollar and avoiding political and economic pressure. Brics Pay has been adopted by numerous institutions and businesses in the BRICS countries, and the list is continuously expanding.

The State Bank of India has launched a Brics Pay mobile app for cross-border transactions, while Russia’s Sberbank has partnered with Brics Pay to enable its customers to make cross-border payments. Similarly, Russia’s VTB bank has integrated Brics Pay into its systems, allowing its customers to make fast and secure payments to other BRICS countries.

The Bank of China and Beijing-based ICBC, one of the largest banks in the PRC, have integrated Brics Pay into their systems and adopted it for cross-border transactions. Similarly, Petrobras in Brazil has also begun using Brics Pay for cross-border transactions. Brics Pay is rooted in the New Development Bank, which is collectively owned by BRICS member countries and processes all financial transactions between them.

BRICS Pay is not limited to BRICS countries alone. Standard Chartered Bank in the UK has integrated Brics Pay into its digital payment platform, allowing its customers to make payments to other BRICS countries.