Alok Kumar, Honorary Governing Body Member & Director BRICS CCI, President (Russia & Central Asia) at Economic Council of India, Group Chairman at AKIS TECH Ltd.
On 22-24 October, Kazan hosted the XVI BRICS Summit, which brought together delegations from 35 countries and six international organisations, and over a dozen leaders from around the world, including the BRICS Plus partners. The Summit also organised hundreds of meetings of various sectoral groups across a wide spectrum.
In his Address on the start of Russia’s BRICS Chairmanship, back at the beginning of the year, Russian Presi-dent Vladimir Putin noted that the Russian BRICS Chairmanship in 2024 will act under the motto “Strength-ening Multilateralism for Just Glob-al Development and Security.” And while the West views BRICS Plus as a hostile entity, the Russian President, prior to the Summit, referring to the words of Indian Prime Minister Narendra Modi, emphasised that BRICS is “not an anti-Western association,” it is “simply not Western” and “does not oppose itself to anyone.
” With that said, the Summit took place at a critical juncture for the entire world. Military conflicts in Eurasia and the Middle East, along with the lingering effects of the pandemic, continue to make life in the Global South even more difficult. And for these countries, the BRICS offers an alternative platform that potentially meets their aspirations. Among the priorities, the Russian Chairmanship highlighted the joint efforts to tackle challenges in politics and security, economy and finance, humanitarian and cultural spheres.
“BRICS is a system-forming factor in the creation of equal, orderly multipolarity and generally accessible inclusive economic globalisation,” said President Xi Jinping of the People’s Republic of China on the margins of the Summit. In other words, BRICS serves as a platform for the partnership of states whose interests in the fields of politics, economy and security coincide, and relations between countries are based on the principles of non-interference, equality, multipolarity, and mutual benefit.
There is currently not a single country that is not in some way exploring the possibility of establishing contacts with BRICS, the states are joining BRICS without any pressure and, above all, want justice and peace. The new BRICS countries cover over 30% of the Earth’s landmass, are home to 45% of the world’s population (3.6 billion people), and account for more than 40% of total oil pro-duction, and about a quarter of global commodity exports.
” With that said, the Summit took place at a critical juncture for the entire world. Military conflicts in Eurasia and the Middle East, along with the lingering effects of the pandemic, continue to make life in the Global South even more difficult. And for these countries, the BRICS offers an alternative platform that potentially meets their aspirations. Among the priorities, the Russian Chairmanship highlighted the joint efforts to tackle challenges in politics and security, economy and finance, humanitarian and cultural spheres.
“BRICS is a system-forming factor in the creation of equal, orderly multipolarity and generally accessible inclusive economic globalisation,” said President Xi Jinping of the People’s Republic of China on the margins of the Summit. In other words, BRICS serves as a platform for the partnership of states whose interests in the fields of politics, economy and security coincide, and relations between countries are based on the principles of non-interference, equality, multipolarity, and mutual benefit.
There is currently not a single country that is not in some way exploring the possibility of establishing contacts with BRICS, the states are joining BRICS without any pressure and, above all, want justice and peace. The new BRICS countries cover over 30% of the Earth’s landmass, are home to 45% of the world’s population (3.6 billion people), and account for more than 40% of total oil pro-duction, and about a quarter of global commodity exports.
BRICS total GDP in terms of purchasing power parity has long surpassed that of the G7, estimated by the IMF at 32.1% and 27.6% respectively in 2023. “BRICS is important in itself, but the upcoming BRICS summit at the moment in the geopolitical situation is the most important of all. It could be a turning point in world history,” said British politician and journalist George Galloway prior to the Summit.
He noted that the BRICS Summit in Kazan may be remembered as an event that pursued a noble goal — to achieve a fairer world order. Western countries have a “winner-take-all” policy, which BRICS is fighting against by pushing for favorable solutions to world problems for most players in the international arena. BRICS will be the next global economic hub. Successful economic projects are born from people’s per-sonal trust, while common views on the achievements of culture, science and the desire for peace lay the best foundation for strategic economic integration.
He noted that the BRICS Summit in Kazan may be remembered as an event that pursued a noble goal — to achieve a fairer world order. Western countries have a “winner-take-all” policy, which BRICS is fighting against by pushing for favorable solutions to world problems for most players in the international arena. BRICS will be the next global economic hub. Successful economic projects are born from people’s per-sonal trust, while common views on the achievements of culture, science and the desire for peace lay the best foundation for strategic economic integration.
And BRICS is building its policies on this very foundation. “BRICS is attracting an ever-in-creasing number of supporters and like-minded countries that share its underlying principles, namely, sovereign equality, respect for the chosen path of development, mutual consideration of interests, openness, consensus, the aspiration to form a multipolar international order and a fair global financial and trade system, and pursuit of collective solutions to top challenges of our time,” emphasised Vladimir Putin in his Address.
It is no surprise that after the first phase of expansion of the BRICS membership in Johannesburg, 34 countries have expressed interest in joining the grouping, which attests to its efficiency and potential, at least as perceived by the Global South. In the geo-economic context, BRICS is indeed poised to become a powerful collaborative pole within the emerging global power matrix. Kazan was the culmination of the Russian BRICS Chairmanship, with a particular focus on expanding the use of national currencies in mutual trade.
It is no surprise that after the first phase of expansion of the BRICS membership in Johannesburg, 34 countries have expressed interest in joining the grouping, which attests to its efficiency and potential, at least as perceived by the Global South. In the geo-economic context, BRICS is indeed poised to become a powerful collaborative pole within the emerging global power matrix. Kazan was the culmination of the Russian BRICS Chairmanship, with a particular focus on expanding the use of national currencies in mutual trade.
The weaponisation of resources such as natural wealth and financial instruments by the West, especially the US, led to a crisis of confidence both on the part of Russia and many other states. “Russia did not abandon the dollar as a universal currency but was denied in using it, and 95% of trading operations with partners are now in national currencies,” President Vladimir Putin said at the meeting with the heads of leading BRICS media.
Most countries, led by China, Russia and India, have begun to diversify their currency risks, increasingly preferring trade transactions through bilateral currency mechanisms. India alone has signed Unified Payments Interface (UPI) agreements and introduced RuPay cards in over two dozen countries. In fact, most recently, India extended its rupee credit line to Mauritius — a first one for the country. Russia, China, UAE and several other nations have developed their own currency and settlement mechanisms, gradually leading to de-dollarisation.
BRICS Plus countries are now considering establishing a new reserve currency backed by a basket of their respective currencies. At the Kazan Summit, leaders discussed the creation of a potentially gold-backed currency as an alternative to the US dollar, and are likely to announce the way forward on this critical issue. This potential BRICS currency would allow countries to claim their economic independence as opposed to the existing international financial system, which is heavily dependent on the US dollar. Until recently, nearly 100% of oil trading was done in US dollars. However, in 2023, a fifth of all these transactions were reportedly done in other currencies, particularly the yuan, roubles, and even rials and dirhams. This diversification makes sense, given that transaction costs and financial dependencies can undermine national sovereignty.
Nonetheless, any new system will need to address inherent concerns and challenges. The BRICS have numerous rea-sons for wanting to establish a new currency. The current global political and geopolitical landscape — the Russia-Ukraine situation, financial challenges, and the aggressive US foreign policy, particularly largescale sanctions against Russia and its economic boycott — has prompted BRICS countries to explore this possibility.
The BRICS aim to better satisfy their own economic interests, while reducing global dependence on the US dollar and the euro. Let us not forget that for decades the US dollar has enjoyed dominance as the world’s leading reserve currency. Between 1999 and 2019, it was used in 96% of international trade settlements in the Americas, 74% in Asia-Pacific and 79% in the rest of the world, according to the US Federal Reserve.
BRICS Plus countries are now considering establishing a new reserve currency backed by a basket of their respective currencies. At the Kazan Summit, leaders discussed the creation of a potentially gold-backed currency as an alternative to the US dollar, and are likely to announce the way forward on this critical issue. This potential BRICS currency would allow countries to claim their economic independence as opposed to the existing international financial system, which is heavily dependent on the US dollar. Until recently, nearly 100% of oil trading was done in US dollars. However, in 2023, a fifth of all these transactions were reportedly done in other currencies, particularly the yuan, roubles, and even rials and dirhams. This diversification makes sense, given that transaction costs and financial dependencies can undermine national sovereignty.
Nonetheless, any new system will need to address inherent concerns and challenges. The BRICS have numerous rea-sons for wanting to establish a new currency. The current global political and geopolitical landscape — the Russia-Ukraine situation, financial challenges, and the aggressive US foreign policy, particularly largescale sanctions against Russia and its economic boycott — has prompted BRICS countries to explore this possibility.
The BRICS aim to better satisfy their own economic interests, while reducing global dependence on the US dollar and the euro. Let us not forget that for decades the US dollar has enjoyed dominance as the world’s leading reserve currency. Between 1999 and 2019, it was used in 96% of international trade settlements in the Americas, 74% in Asia-Pacific and 79% in the rest of the world, according to the US Federal Reserve.
Even though the exact date of the launch of the new currency has not yet been determined, the leaders are already discussing this possibility. Back in 2022, Russian President Vladimir Putin said in his greeting to the participants of the BRICS Business Forum (Brazil, Russia, India, China, South Africa) that the countries were planning to issue a “new global re-serve currency,” and that Russia was “ready to work openly with all bona fide partners based on the principles of mutual respect for each.”
In April 2023, Brazilian President Luiz Inácio Lula da Silva, currently chairing the G20, voiced his support for a BRICS currency, commenting, “Why can’t an institution like the BRICS bank have a currency to fi-nance trade relations between Brazil and China, between Brazil and all the other BRICS countries? Who decided that the dollar was the trade currency after the end of gold parity?”
Whatever form it takes, it will need to be a neutral BRICS currency, digital or otherwise, with combined financial strength and a robust settlement mechanism to address intra-BRICS trust deficit. For example, India has been settling its oil payments with Russia in rupees or even dirhams, but has declined to settle outstanding dues in yuan due to its own geoeconomic considerations. A new currency could offer several benefits for the BRICS countries, including more efficient cross-border transactions and increased financial inclusion.
In April 2023, Brazilian President Luiz Inácio Lula da Silva, currently chairing the G20, voiced his support for a BRICS currency, commenting, “Why can’t an institution like the BRICS bank have a currency to fi-nance trade relations between Brazil and China, between Brazil and all the other BRICS countries? Who decided that the dollar was the trade currency after the end of gold parity?”
Whatever form it takes, it will need to be a neutral BRICS currency, digital or otherwise, with combined financial strength and a robust settlement mechanism to address intra-BRICS trust deficit. For example, India has been settling its oil payments with Russia in rupees or even dirhams, but has declined to settle outstanding dues in yuan due to its own geoeconomic considerations. A new currency could offer several benefits for the BRICS countries, including more efficient cross-border transactions and increased financial inclusion.
By leveraging blockchain technology, digital currencies, and smart contracts, such a currency could revolutionise the global financial system. Seamless cross-border payments could also promote trade and economic integration among BRICS nations and beyond, while mitigating risks associated with global volatility caused by unilateral measures and reducing dependence on the dollar. “We believe that creating an independent BRICS payment system is an important goal for the future, which would be based on state-of-the-art tools such as digital technologies and blockchain. The main thing is to ensure it is convenient for governments, common people, and businesses, as well as cost-effective and free of politics,” said Kremlin aide Yury Ushakov not long ago.
While BRICS nations do not yet have their own specific digital currency, a BRICS blockchain-based payment system is reportedly under development. Known as the BRICS Bridge multisided payment platform, it would connect member states’ financial systems using payment gate-ways for settlements in central bank digital currencies. This planned system would serve as an alternative to the current international cross-border payment platform, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system, dominated by US dollars. In general, the impact of a new BRICS currency on the US dollar will depend on a number of factors: its prevalence, sustainability, and the extent to which it can offer a viable alternative to the dollar.
This process will take time and require concerted efforts from all BRICS members to ensure that each country feels duly invested and rewarded. One of the pull factors for nations, besides the use of national currencies in mutual settlements, is also the fact that the BRICS has emerged as a major non-Western platform and is viewed as a more democratic structure. BRICS has become a constellation of non-western powers that aims to promote multipolarity and comprehensive inclusive economic globalisation.
Moreover, BRICS’s flexibility is another pull factor, which does not come with conditionalities for membership. Thus, it is no surprise that another 30 countries want to join the grouping in one quality or another. The very same countries that are already members of BRICS, such as India, Brazil and South Africa, through their balanced stance on global issues, were able to dispel misconceptions of BRICS as an anti-Western structure.
They do not want to keep all their eggs in one basket by depending solely on the West, but seek to build their foreign policy on the principles of strategic independence and multipolarity. In this respect, the positive role of the BRICS can hardly be overestimated. Moreover, these countries have rather shifted the focus towards amplifying the voices and interests of the Global South, concentrating on the climate crisis, economic development, and social equity.
This also reaffirms BRICS’ strive for multipolarity and equality. Speaking of which, BRICS for India is a pivotal plurilateral as it reflects New Delhi’s multipolar worldview and acts as a platform for strengthening its glob-al standing. Prime Minister Narendra Modi’s visit to Kazan, in particular, testifies to this.
The BRICS countries contributed significantly to enhancing the grouping’s cooperation in finance, trade, agriculture, education, counter-terrorism, anti-corruption, and security in the use of ICTs. BRICS’s expansion has opened up opportunities for cooperation with like-minded countries that perceive the international system through a similar lens, including Egypt, Ethio-pia, Saudi Arabia, and the UAE. Like India, they did not join the sanctions against Russia, but unlike Moscow and Beijing, did not wholly advocate for de-dollarisation.
These countries, like others, view the strengthening of their respective currencies in the global financial landscape as their long-term goal. The XVI BRICS Summit culminated in the 134-point Kazan Declaration, which called for improving global governance by promoting an accountable multilateral system in which the voices of the Global South are given even greater consideration. Furthermore, Narendra Modi’s proposal to host the COP33 in India in 2028 was favourably received.
While it is yet unclear how and to what extent the BRICS objectives will be achieved, we are sure of one thing: the main goal of the Summit was to build trust, boost trade and transform multilateral institutions. And we are confident that the 3Ts — trust, trade and transformation — are the path to making the world more peaceful and more prosperous.
While BRICS nations do not yet have their own specific digital currency, a BRICS blockchain-based payment system is reportedly under development. Known as the BRICS Bridge multisided payment platform, it would connect member states’ financial systems using payment gate-ways for settlements in central bank digital currencies. This planned system would serve as an alternative to the current international cross-border payment platform, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system, dominated by US dollars. In general, the impact of a new BRICS currency on the US dollar will depend on a number of factors: its prevalence, sustainability, and the extent to which it can offer a viable alternative to the dollar.
This process will take time and require concerted efforts from all BRICS members to ensure that each country feels duly invested and rewarded. One of the pull factors for nations, besides the use of national currencies in mutual settlements, is also the fact that the BRICS has emerged as a major non-Western platform and is viewed as a more democratic structure. BRICS has become a constellation of non-western powers that aims to promote multipolarity and comprehensive inclusive economic globalisation.
Moreover, BRICS’s flexibility is another pull factor, which does not come with conditionalities for membership. Thus, it is no surprise that another 30 countries want to join the grouping in one quality or another. The very same countries that are already members of BRICS, such as India, Brazil and South Africa, through their balanced stance on global issues, were able to dispel misconceptions of BRICS as an anti-Western structure.
They do not want to keep all their eggs in one basket by depending solely on the West, but seek to build their foreign policy on the principles of strategic independence and multipolarity. In this respect, the positive role of the BRICS can hardly be overestimated. Moreover, these countries have rather shifted the focus towards amplifying the voices and interests of the Global South, concentrating on the climate crisis, economic development, and social equity.
This also reaffirms BRICS’ strive for multipolarity and equality. Speaking of which, BRICS for India is a pivotal plurilateral as it reflects New Delhi’s multipolar worldview and acts as a platform for strengthening its glob-al standing. Prime Minister Narendra Modi’s visit to Kazan, in particular, testifies to this.
The BRICS countries contributed significantly to enhancing the grouping’s cooperation in finance, trade, agriculture, education, counter-terrorism, anti-corruption, and security in the use of ICTs. BRICS’s expansion has opened up opportunities for cooperation with like-minded countries that perceive the international system through a similar lens, including Egypt, Ethio-pia, Saudi Arabia, and the UAE. Like India, they did not join the sanctions against Russia, but unlike Moscow and Beijing, did not wholly advocate for de-dollarisation.
These countries, like others, view the strengthening of their respective currencies in the global financial landscape as their long-term goal. The XVI BRICS Summit culminated in the 134-point Kazan Declaration, which called for improving global governance by promoting an accountable multilateral system in which the voices of the Global South are given even greater consideration. Furthermore, Narendra Modi’s proposal to host the COP33 in India in 2028 was favourably received.
While it is yet unclear how and to what extent the BRICS objectives will be achieved, we are sure of one thing: the main goal of the Summit was to build trust, boost trade and transform multilateral institutions. And we are confident that the 3Ts — trust, trade and transformation — are the path to making the world more peaceful and more prosperous.
Photos from Roscongress Foundation's archive.