BRICS Countries Push To Integrate National Payment Systems And Reduce Dependence on US Dollar

India and Russia, two of the largest members of the BRICS economic alliance, are exploring ways to link their payment systems in a move that could circumvent financial sanctions against Moscow. According to the Economic Times, India's External Affairs Minister S Jaishankar and Russia's Deputy Prime Minister Denis Manturov are analyzing how the two countries can create new payment avenues that could bypass sanctions against Moscow. They are looking into integrating India's Unified Payment Interface (UPI) and Russia's Faster Payments Systems (FPS), with the aim of creating a new payment method for cross-border transactions.

The UPI is a mobile payment method that allows users to make real-time transfers, while the FPS is a service that enables users to transfer funds between banks using their mobile number. The two officials also agreed to look into adopting the Financial Messaging System of the Bank of Russia for cross-border payments in an effort to move away from the global interbank platform SWIFT.

The BRICS economic alliance is made up of Brazil, Russia, India, China, and South Africa. The recent talks between India and Russia come as BRICS moves to create a new global currency that doesn't rely on the US dollar. According to Anatoly Aksakov, Russia's Chairman of the State Duma Committee on the Financial Market, negotiations about the details of the new currency are underway and the economic alliance might reach an agreement by the end of the year.

The move towards a new global currency comes as tensions between the US and Russia remain high. Sanctions against Russia have been in place since 2014, following the annexation of Crimea, and have been strengthened in recent years over alleged election interference and cyber attacks. These sanctions have limited Russia's ability to access the global financial system, and the country has been looking for ways to circumvent them.

India, on the other hand, has been seeking to reduce its dependence on the US dollar and the global financial system. In recent years, the country has signed currency swap agreements with several countries, including Japan, Russia, and the UAE, to reduce its exposure to the US dollar.

The move towards a new global currency also reflects a broader trend towards de-dollarization. Many countries, including China and Russia, have been seeking to reduce their dependence on the US dollar in recent years, as they seek to reduce the power and influence of the US in the global financial system.

The move towards a new payment system between India and Russia could also have implications for other countries seeking to bypass US sanctions. For example, Iran has been developing its own cryptocurrency, the Crypto-Rial, to circumvent US sanctions. The use of digital currencies and other alternative payment methods could become more widespread as countries seek to bypass the US-dominated global financial system.

Overall, the move towards a new global currency and alternative payment systems represents a challenge to the dominance of the US in the global financial system. While it remains to be seen whether these efforts will be successful, they reflect a growing desire among many countries to reduce their dependence on the US dollar and the US-dominated global financial system.