Putin: No Plans to Create BRICS Cross-Border Payments System

Russian President Vladimir Putin reportedly said Thursday (Oct. 24) that there are no plans to create a new system for cross-border payments between BRICS countries.

Speaking at a summit of BRICS countries — which include Brazil, Russia, India, China and South Africa — Putin said the existing financial messaging systems run by BRICS central banks could be used to facilitate payments between the countries in national currencies, Reuters reported Thursday.

“But we are not inventing any separate joint system for now,” Putin said, per the report. “What we already have is on the whole sufficient.”

It was reported Oct. 11 that a Russian report published before the summit included a plan to create a new system for cross-border payments between BRICS countries.

Prepared by the Russian Finance Ministry, the Bank of Russia and Moscow-based consultancy Yakov & Partners, the report included options like developing a network of commercial banks to conduct cross-border transactions in local currencies, establishing direct links between central banks, creating centers for mutual trade in commodities, and using distributed ledger technology (DLT) or a new multinational platform for settlements with tokens.

Russia aims to circumvent the existing global financial system and make its economy more resistant to international sanctions, the report said.

It was reported in August that Russia was preparing to begin trials of cryptocurrency exchanges and cross-border crypto transactions to solve the payment troubles the country has been facing after more than two years of worldwide sanctions.

Russian lawmakers adopted bills in July legalizing crypto mining and a framework for the testing of digital tokens for cross-border payments under supervision by the central bank, and Putin signed the bills into law Aug. 8.

Half of all payments by Russian companies for Chinese products are now handled by intermediaries because of sanctions on payments between the two countries.

With the United States Treasury warning it could impose sanctions on entities that facilitate transactions between the countries, banks in China have begun scaling back their dealing with Russian businesses, which in turn are scrambling to open accounts at the only Russian lender with a Chinese branch, leading to a bottleneck.