BRICS Summit in New Delhi: The Beginning of a Transformation in International Payment Systems

The 18th BRICS Summit was held on September 12 and 13, 2023, in New Delhi, India. At this summit, the leaders of member countries announced plans to expand trade systems with local currencies and cross-border payment systems by investing in BRICS Pay, an initiative of the BRICS Business Council.

Development of Cross-Border Payment Systems

At this summit, it was emphasized that the BRICS Payment Council (BPTF) should provide practical solutions for cross-border payments among BRICS countries. These solutions should be fast, low-cost, accessible, efficient, transparent, and secure. Manoj Kewalramani, head of the Takshashila Institute's Geopolitical Program in Bangalore, pointed out that this announcement does not indicate a search for a single system but is likely to include a set of options that can be agreed upon among member countries.

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BRICS Pay and Its Role in the Global Economy

While the New Delhi announcement did not explicitly mention that BRICS countries intend to replace the dollar or create a common currency, it indicates that BRICS is increasingly seeking alternative payment systems amid geopolitical tensions and Western trade sanctions against its members, such as Russia and China. If systems like BRICS Pay are fully operational, they could serve as an alternative to Western payment systems like SWIFT.

BRICS Pay has been proposed as a decentralized digital payment ecosystem since 2018, designed to facilitate payments among BRICS countries. This system, which includes 11 member countries, encompasses about 49% of the world's population and 40% of global GDP. According to the BRICS Pay website, this system is designed as a "strategic infrastructure" for friendly BRICS countries and offers an option compatible with Western payment systems like SWIFT, Visa, and MasterCard.

This system was officially approved in 2024 by the BRICS Business Council, and in August 2023, prior to the BRICS summit in New Delhi, finance ministers and central bank officials from member countries discussed the progress of this project in Jaipur, India. Currently, BRICS Pay is in the testing and gradual implementation stages and has not yet been globally operational for all members.

BRICS Pay helps connect the national payment systems of member countries to facilitate international payments easily. This means that business transactions between entities or individuals in two different countries can be conducted using local currencies, eliminating the need for the intervention of other currencies such as the dollar. Payments in local currencies are settled using QR codes, digital wallets, or mobile applications.

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