Finance minister Enoch Godongwana says the intention of launching Brics Pay is not to replace existing systems but to facilitate trade using local currencies.
At the Brics Business Forum on October 17 and 18 in Moscow, Russia, the group of nations introduced a new payment system called Brics Pay.
Participants were given new cards loaded with 500 roubles (R91.19) which they can use for purchases at designated shops marked with the Brics Pay label.
This initiative represents a significant move towards enhancing local currency transactions among the 159 countries poised to adopt Brics Pay. The system aims to reduce reliance on the US dollar and traditional financial networks such as SWIFT.
Godongwana said the initiative stemmed from a desire to enhance trade among member countries, particularly for nations such as Russia, which had faced economic challenges due to Western sanctions and exclusion from SWIFT.
“It is a payment system which facilitates a deepening of the use of local currencies,” Godongwana said, adding this was not an alternative to SWIFT.
The testing phase of Brics Pay, which features QR code payments, is designed to link national payment methods with commercial systems in Brics+ nations. The technology is based on blockchain and supports digital currencies or stablecoins pegged to the national currencies of member states.
The goal is to establish cross-border retail support throughout the Brics+ bloc, with future plans to expand into business-to-business payments and the development of the Brics+ unit, Russia’s proposed cryptocurrency for the bloc.
Despite this promising development, experts caution full implementation may still be years away.
The testing phase does not indicate an official launch, nor does it signify all Brics nations have agreed to adopt the system. However, it marks a significant milestone in a project that has been in the works since 2019.
The Brics leaders previously tasked their finance ministers to explore local currencies and payment platforms during a summit in Johannesburg last year.
As Brics Pay undergoes testing, the next major event for the bloc will be the 2024 Brics Summit, set to take place in Kazan, Russia, from October 22 to 24.
TimesLIVE
Brics Pay unveiled as a step towards local currency transactions
Image: Elmond Jiyane
Finance minister Enoch Godongwana says the intention of launching Brics Pay is not to replace existing systems but to facilitate trade using local currencies.
At the Brics Business Forum on October 17 and 18 in Moscow, Russia, the group of nations introduced a new payment system called Brics Pay.
Participants were given new cards loaded with 500 roubles (R91.19) which they can use for purchases at designated shops marked with the Brics Pay label.
This initiative represents a significant move towards enhancing local currency transactions among the 159 countries poised to adopt Brics Pay. The system aims to reduce reliance on the US dollar and traditional financial networks such as SWIFT.
Godongwana said the initiative stemmed from a desire to enhance trade among member countries, particularly for nations such as Russia, which had faced economic challenges due to Western sanctions and exclusion from SWIFT.
“It is a payment system which facilitates a deepening of the use of local currencies,” Godongwana said, adding this was not an alternative to SWIFT.
The testing phase of Brics Pay, which features QR code payments, is designed to link national payment methods with commercial systems in Brics+ nations. The technology is based on blockchain and supports digital currencies or stablecoins pegged to the national currencies of member states.
The goal is to establish cross-border retail support throughout the Brics+ bloc, with future plans to expand into business-to-business payments and the development of the Brics+ unit, Russia’s proposed cryptocurrency for the bloc.
Despite this promising development, experts caution full implementation may still be years away.
The testing phase does not indicate an official launch, nor does it signify all Brics nations have agreed to adopt the system. However, it marks a significant milestone in a project that has been in the works since 2019.
The Brics leaders previously tasked their finance ministers to explore local currencies and payment platforms during a summit in Johannesburg last year.
As Brics Pay undergoes testing, the next major event for the bloc will be the 2024 Brics Summit, set to take place in Kazan, Russia, from October 22 to 24.
TimesLIVE
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