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BRICS Payment System to Protect Transactions of Nations Facing West's Economic Sanctions

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BRICS Pay - Sputnik India, 1920, 07.06.2024
With BRICS nations like Russia and Iran facing the brunt of unilateral economic sanctions imposed on them by the West, member states are pushing to formalize a new payment method that would ensure that transactions are free from any interference from the US-led financial system.
A BRICS payment network which is being developed by the powerful economic bloc will protect the financial transactions of countries that are facing the West's economic sanctions, a strategic affairs pundit has said.
The comments of Dr. Anuradha Chenoy, a former professor of international relations at the New Delhi-based Jawaharlal Nehru University (JNU) came in the aftermath of Russian President Vladimir Putin's remarks about a new BRICS payment system that would prevent the US and its allies from using financial networks as instruments of political pressure and abuse.
"BRICS is working on the formation of an independent payment system that is not subject to political pressure, abuse, and external bailout intervention," Putin said at the plenary session of the St. Petersburg International Economic Forum on Friday.
In this light, Chenoy emphasized that the independent payment system being formalized by BRICS is to facilitate financial transactions between countries. In essence, this would facilitate inter-state trade where volumes are high and in between countries.
She suggested that this was a period of e-payments and hence, the organisation states were looking at this mechanism. But it will take time to implement it.
However, it has to be foolproof because high finances are involved. Yet, gradually it would be put in place, the academic expressed.
The other important thing to note is that it is important because it can bypass the traditional payment methods like SWIFT which are completely dominated by the West.

"It will be a good mechanism to protect and safeguard the transactions of those countries that are sanctioned. For instance, nations like Iran, Russia, and even India at a certain period have faced economic sanctions," Chenoy told Sputnik India.

BRICS countries are looking at some secure ways in which their own currencies will also be strengthened and not subject to political or weaponized dollar or USD fluctuations, the JNU professor noted.
Moreover, the group countries have quite steady economies.
"Plus, their purchasing power parity is high, and with new nations, especially states that are rich oil-producing nations like Iran, UAE, and Saudi Arabia which are part of OPEC, the trading between these countries and other BRICS members can really increase and if they have this kind of system, it would be extremely useful for them," Chenoy reckoned.
On the other hand, Niranjan Marjani, who is an international relations analyst and researcher at the Kalinga Institute of Indo-Pacific Studies (KIIPS), stressed that the BRICS payment system signals the emergence of a new world order, in which Global South will be at the forefront.
"The Global South is already becoming a major force in the world order and BRICS nations, including India and Russia, are playing a key role in forwarding the interests of nations that are part of the Global South," he concluded.
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