Russia’s BRICS Bridge explores cross-border payments with China and Gulf countries

Russia is reportedly preparing to shift to using digital currencies to settle international transactions with its allies amid economic sanctions.

Sputnik International reported that the Russian bank is ready to start initial tests with China and the countries that make up the Eurasian Economic Union (EAEU). The EAEU consists of Belarus, Kazakhstan, Armenia, Kyrgyzstan, and Russia.

Russian Finance Minister Anton Siluanov said his country was exploring new digital currency-based payment alternatives with oil-rich Gulf countries. Siluanov’s remarks did not mention any specific countries, but analysts expect the United Arab Emirates (UAE) to form part of the initial tests given its previous work on digital currencies.

Siluanov exposed Russia’s ambitions at a meeting of finance ministers and central bank governors from BRICS countries in Sao Paulo, Brazil. Russia currently chairs the BRICS bloc, and its top priority is to move away from the US dollar as its de facto trade currency.

Russia is exploring several options in cooperation with other BRICS countries, including the prospects of central bank digital currencies (CBDCs), local fiat currencies, stablecoins and other forms of digital currencies.

Siluanov said Russian officials would be keen to build a BRICS Bridge system designed to operate as a multilateral digital payments platform. Details about the BRICS Bridge are sparse, but there is speculation that it will involve interconnecting CBDCs and financial messaging systems.

“We propose to create, on the basis of BRICS institutions, a BRICS Bridge system that can be used in our countries, ensures an appropriate level of equality and will contribute to the development of trade relations,” Siluanov said.

The proposed system is inspired by the Bank for International Settlements (BIS)-backed mBridge platform, with which China and the UAE are already recording initial success.

Russia has previously mulled over the prospects of digital assets for cross-border trading, with several major financial institutions launching pilot projects despite the government’s strong opposition to domestic trading.

new world order

Siluanov said the global financial order has been undergoing profound changes in recent years, with emerging economies showing greater potential than G7 countries. Recognizing the changing dynamics, the finance minister argues that Western powers are trying to hinder the growth of emerging economies.

“These changes are not simple,” Siluanov said. “We know what restrictions and sanctions are being attempted to curb China and Russia. This is the result of a paradigm shift.”

Russia said that as chair of the bloc, it would advance the economic interests of BRICS members.

Watch: Blockchain is the most secure way to make payments.

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