Russia Outlines “BRICS Bridge” Digital Settlement Plans

Russia has proposed to BRICS countries and partnership members a mechanism for cross-border payments based on the BRICS Bridge settlement platform, according to Anton Siluanov, Russia’s Finance Minister. He explained that the mechanism would see BRICS members central banks issue digital financial assets (DFAs), which would in turn peg their value to the national currencies of the participating countries.

Settlement participants – for example companies involved in cross-border BRICS transactions, will use this infrastructure as an alternative to traditional settlements for making payments. This does not mean a single settlement such as a digital currency is being put into position, but that a technological solution to simplify and improve settlement procedures already exists and with cooperation can be put into operation. The procedure also sidesteps the SWIFT network.

Currently, the BRICS Bridge project is at an advanced stage of development, according to the Ministry of Finance, who stated in response to questions that “The concept is being developed, possible settlement mechanisms and lists of potential project participants are being formed. The issue is discussed within the BRICS countries in an on-going manner. We will implement it step by step, it is important for us to hear the opinion of all participants of the future platform.”

The BRICS currently includes Brazil, China, Egypt, Ethiopia, India, Iran, Russia, South Africa and the UAE. Saudi Arabia is expected to ratify its membership soon. Another 30 countries have expressed serious interest in joining.

The key idea behind creating such a platform is to increase the speed and accessibility of payments. According to the Ministry of Finance representative, platform participants will be able to settle with each other almost instantly, while the costs of making payments will be minimal.