The Russian state-funded news organization TASS ‘new report shows that the group of finance ministers is assessing the usefulness of the unified payments network and will formally discuss its strength in next year’s BRICS. The BRICS finance ministers have been tasked to consider the issues of local currencies, payment instruments, and platforms and report back in a year.
What did the Finance Minister of Russia and South Africa Say?
Anton Siluanov, Russian finance minister says that the network would enhance the independent efforts to create payment messaging systems. He stated- “We are trying to introduce our financial messaging system, the SPFS, other BRICS countries are also trying to build it and our Chinese colleagues too have their systems.”
He added that this is why this matter should be under discussion with money authorities and financial agencies of BRIC member states. The news has come after the BRICS announcement of formally including Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the UAE to the group. At present, BRICS includes Brazil, Russia, India, China, and South Africa. Recently, the group announced the inclusion of some more countries.
Anton Siluanov in response to the future potential of BRICS said that the bloc aims to remove all ties from the West to the Southeast in a growing trend that will last in the future.
SWIFT is the main component of the global banking system and is used by banks to send and receive money-related messages securely. In March 2022, the organization which is a cooperative that’s mainly owned by banks, banned several Russian banks at the behest of the European Union.
In August, South Africa’s finance minister Enoch Godongwana said that the payments system of BRICS would aim to build up trade in the native currencies instead of the US dollar.
But he also added that execution would be not easy and the system would not be designed to straightforwardly challenge SWIFT. In a way, he clarified that the BRICS grouping would not be looking to replace the international payment system including SWIFT but rather consider creating one that would strengthen trade in local currencies.
China is clearly at the forefront of using its currency, the renminbi, for its international trade and investment. Trade in the renminbi is intensively done with the other BRICS countries but more in general with the other emerging economies worldwide.