By John Ikani
Russian President Vladimir Putin has signalled that the idea of a unified BRICS currency is still far off, while stressing that the group is moving forward with plans to explore digital currencies for cross-border trade and investments. He noted that Russia is working closely with India and other member nations on the initiative.
Putin suggested a cautious strategy for any future reserve currency, citing the varying economic frameworks among BRICS nations. For now, he recommended focusing on national currencies, new financial tools, and creating a system similar to SWIFT for secure transactions. “A BRICS currency is a long-term objective,” he stated during a meeting with senior editors from BRICS countries, held at his residence near Moscow.
Putin’s remarks came as a response to questions about the BRICS bloc, an economic alliance aiming to provide an alternative to Western-dominated systems, and its intentions of developing a reserve currency. His comments come ahead of the 16th BRICS summit, which Russia will host in the city of Kazan. Indian Prime Minister Narendra Modi is expected to attend the summit on October 22-23, marking the first summit since BRICS expanded to include Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE, alongside founding members Brazil, Russia, India, China, and South Africa.
Responding to further inquiries, Putin said BRICS nations are discussing how to increase the use of national currencies and develop safe mechanisms for financial settlements. He mentioned that the bloc is also looking into the application of digital tools to ensure security in these transactions.
Putin emphasized the importance of creating a reliable system for these transactions, overseen by BRICS institutions. He indicated that this approach could be highly beneficial for the Global South, with consultations already ongoing between China, India, Brazil, and South Africa.
Addressing the idea of a future BRICS reserve currency, Putin advised against rushing into it, stressing the need for economic parity among the member nations. He highlighted that if BRICS moves too quickly without ensuring this balance, they could face challenges similar to those experienced by the European Union with the introduction of the euro in unequal economies. As such, a BRICS currency is still a distant goal.
The Russian president also underlined the necessity of closer collaboration between the member states’ central banks to establish a financial information exchange system that operates independently of politically motivated international platforms. He noted that BRICS is working on an alternative to the SWIFT system, which would help secure international transactions.
Russia and other BRICS countries are already advancing towards the development of a SWIFT-like system, Putin stated. He also highlighted that the group is working on implementing digital currencies to support major investment projects. In addition, the BRICS bloc is preparing to launch BRICS Pay, a blockchain-driven payment system designed to make cross-border transactions easier within the group.
Putin further pointed out that digital currencies could offer significant benefits to both BRICS and developing countries, reinforcing the bloc’s mission to reduce reliance on the US dollar. The move aims to boost economic sovereignty for the member states. He argued that the US sanctions have worsened its relations with Russia and may have long-term consequences for the global dominance of the dollar.
According to Putin, the use of the US dollar in global trade and reserves is already diminishing, with even traditional US allies cutting back on their dollar reserves. He claimed that 95% of Russia’s international trade is now conducted in national currencies.
Beyond financial strategies, BRICS countries are also advocating for reforms in global governance, pushing for new institutions to challenge the dominance of existing ones, including the US dollar’s role in global finance. While Russia and China are actively pursuing ways to reduce their reliance on the dollar, India has taken a more moderate stance.
India has repeatedly stated that it has no plans to abandon the US dollar and will continue using it in global trade where necessary. In a recent statement, External Affairs Minister S. Jaishankar clarified that India is not seeking to undermine the dollar’s role in global trade, nor does it support a de-dollarization agenda.
Jaishankar explained, “We have never actively targeted the US dollar. This is not part of our economic, political, or strategic policy.” He also acknowledged that other BRICS members might have different reasons for pursuing a de-dollarization strategy.
With the addition of five new members, BRICS has now become a major force in the global economy, representing half of the world’s population, 38% of global GDP, and 40% of global trade, based on available data.
