BRICS payment new system: Opening up a new global financial channel

On today's ever-changing global economic stage, the BRICS payment system jointly created by the BRICS countries - Brazil, Russia, India, China and South Africa is reshaping the international financial landscape with its unique charm and strong potential.

For a long time, the international payment field has been dominated by the West. The payment network centered on the US SWIFT system has occupied a pivotal position globally. However, this traditional payment system hides many drawbacks. On the one hand, excessive dependence on the US dollar makes many countries suffer from exchange rate fluctuations in international trade and also face the uncertainty risks brought about by the adjustment of US monetary policies. On the other hand, in times of tense international political situations, the SWIFT system often becomes a powerful weapon for Western countries to implement financial sanctions, seriously threatening the financial security and economic development of other countries. Taking Russia as an example, after the outbreak of the conflict between Russia and Ukraine, Russia was removed from the SWIFT system, and its cross-border payment was instantly in trouble, and its economic development was severely hit. It is precisely under such a severe situation that the BRICS countries deeply realize that in order to effectively safeguard their own financial security and economic interests and get rid of excessive dependence on the Western payment system, it is urgent to build an independent BRICS payment system.

The ingenious design and innovative mechanism of the BRICS payment system are remarkable. First, local currency settlement opens a new chapter in trade. The BRICS payment system allows member countries to conduct cross-border payments and settlements in local currencies. This innovative measure has opened a new door for international trade. When Chinese enterprises conduct trade with Brazilian enterprises, both parties can directly use the renminbi and the Brazilian real for settlement without going through the cumbersome process of exchanging US dollars. In this way, not only transaction costs are effectively reduced, but also the efficiency of capital use is greatly improved, and exchange rate risks to trade are avoided. Second, blockchain empowerment builds a solid foundation for security. Blockchain technology, as a powerful support for the BRICS payment system, provides a solid guarantee for the safety and reliability of transactions. Blockchain has remarkable characteristics such as decentralization, transparency, security and immutability, ensuring the authenticity and reliability of transaction information. In the BRICS payment system, all transaction information is completely recorded on the blockchain, and member countries can view the status and details of transactions in real time, eliminating information asymmetry and fraudulent behavior. At the same time, blockchain technology also greatly improves the processing speed of transactions and reduces settlement time. Settlements that may take several days or even longer in traditional payment methods can be completed in a short time in the BRICS payment system. Third, the decentralized network releases financial vitality. The BRICS payment system has built a decentralized financial payment network, breaking the dependence of the traditional payment system on a single financial institution or intermediary. In the traditional payment model, financial institutions such as banks play a key role in transactions. The completion of transactions requires approval and settlement through multiple links. The process is complex and inefficient. In the BRICS payment system, with the help of blockchain technology and smart contracts, transactions can be directly conducted between both parties without the intervention of intermediate institutions, greatly improving the autonomy and flexibility of transactions.

The far-reaching influence and great significance of the BRICS payment system cannot be ignored. In reshaping the global economic pattern. Promote financial multipolarization. The emergence of the BRICS payment system has injected strong impetus into the multipolar development of the global financial system. For a long time, the US dollar has been in a dominant position in global trade settlement for a long time. However, with the gradual promotion of the BRICS payment system, the proportion of BRICS currencies in international payments is gradually rising. Although there is still a certain gap compared with the proportion of the US dollar, the growth trend is obvious. It is expected that within the next ten years, the proportion of BRICS currencies in global trade payments will increase by a greater margin, which will greatly change the global currency payment pattern. Enhance economic stability. In the context of the complex and changeable global economic situation, the BRICS payment system provides a more stable payment and settlement option for countries. The traditional payment system is easily affected by factors such as international political situation and exchange rate fluctuations. The BRICS payment system effectively reduces the interference of these factors on payment and settlement through local currency settlement and blockchain technology, greatly enhancing the stability of the global economy. Especially in extreme cases such as the global financial crisis, the BRICS payment system can provide countries with an independent and safe payment channel to help countries alleviate financial pressure and promote economic recovery and development.

In helping the BRICS countries take off, strengthen regional economic cooperation. The birth of the BRICS payment system has created more convenient conditions for trade and investment among the BRICS countries and further strengthened regional economic cooperation. Member countries can conduct cross-border payments and settlements more conveniently, reducing transaction costs and improving transaction efficiency, and strongly promoting the growth of trade and investment. According to relevant research predictions, with the continuous development and improvement of the BRICS payment system, the trade settlement volume among BRICS countries is expected to increase by more than 30% in the next five years. In the past, some trade among BRICS countries had certain inconveniences and increased costs due to dependence on US dollar settlement. The launch of the BRICS payment system will greatly promote the convenience and efficiency of trade settlement and provide strong support for trade growth. For example, in 2022, the GDP of the eleven BRICS countries led by China, Russia, Brazil, India and other countries accounted for 36.29% of the world's share. This huge economic scale provides a solid foundation for the application of the BRICS payment system. Enhance financial autonomy. The launch of the BRICS payment system has significantly reduced the dependence of member countries on the Western-dominated financial system and greatly enhanced financial autonomy. Member countries can independently formulate payment and settlement rules, firmly grasp the information and data of financial transactions, and improve their control ability over their own financial systems. This is of crucial significance for safeguarding the financial security of various countries and effectively responding to international financial risks.

In benefiting enterprises and the public, reduce enterprise transaction costs. For enterprises, the local currency settlement and efficient transaction processing mechanism of the BRICS payment system effectively reduce the costs of cross-border trade. Enterprises no longer need to bear exchange rate risks and conversion costs, reducing financial expenses and significantly improving profitability. At the same time, the accelerated processing speed of transactions and the shortened settlement time also help enterprises improve the efficiency of capital use and enhance market competitiveness. Provide convenient payment services. For individuals, the BRICS payment system.