As Russia prepares to host the 16th BRICS Summit in Kazan from October 22 to 24, President Vladimir Putin is pushing an ambitious agenda aimed at reshaping the global financial system. Central to these efforts is a proposal to establish an alternative international payment platform that is immune to Western sanctions. With growing interest in BRICS membership and increasing pressure from the West, Russia sees the bloc as a key instrument for counterbalancing Western economic dominance.
In recent years, Russia has been increasingly isolated from the global financial system due to sweeping sanctions imposed by Western nations in response to its political actions, particularly the war in Ukraine. To mitigate the effects of these sanctions, Moscow is seeking to galvanize BRICS—a group originally formed by Brazil, Russia, India, China, and South Africa, but recently expanded to include Egypt, Ethiopia, Iran, and the United Arab Emirates (UAE)—to spearhead a new financial system independent of the U.S. dollar.
Russia’s proposal centers around a new payments system that would rely on blockchain technology to transfer digital tokens backed by national currencies. According to a document distributed by Russia’s finance ministry and central bank ahead of the summit, this system would facilitate currency exchanges between BRICS member states without involving the U.S. dollar, thus allowing countries to bypass U.S. sanctions and avoid secondary sanctions.
The proposed system would link commercial banks within BRICS nations through their respective central banks, creating a secure, decentralized network. This would enable the seamless transfer of digital tokens between banks in different countries, facilitating international trade while reducing dependence on Western financial infrastructure. Yaroslav Lissovolik, founder of the BRICS+ Analytics think tank, noted that while the proposal is technically feasible, it will take time to implement, especially given the complexities of building consensus within such a diverse bloc.
Russia’s push to create an alternative payment system comes at a time when BRICS is rapidly expanding. The group, which was initially conceived as a coalition of five emerging economies, has recently grown to include countries from the Middle East and Africa. The addition of Egypt, Ethiopia, Iran, and the UAE reflects the bloc’s growing geopolitical significance.
This year, 30 countries have expressed interest in joining BRICS, and 15 have formally applied for membership, including Thailand, Vietnam, and Kuwait. Russia has invited several non-member countries aspiring to join the bloc to participate in the summit in Kazan, signaling its intention to present BRICS as a global coalition with significant political and economic clout.
The expansion of BRICS could enhance the group’s ability to challenge Western dominance in global trade and finance. By incorporating nations from different regions, BRICS has the potential to form a multi-polar economic alliance, providing a platform for countries seeking alternatives to Western-led institutions such as the International Monetary Fund (IMF) and the World Bank.
However, Russia’s ambitions are not without challenges. The larger and more diverse the BRICS bloc becomes, the more difficult it will be to achieve consensus on key issues. While Russia, China, and Iran may be more willing to push back against Western influence, other members like Brazil, India, and South Africa may be more cautious, preferring to maintain positive relations with both the West and BRICS.
At the heart of Russia’s proposals for BRICS is the desire to overhaul the global financial system. The document circulated by Russia’s finance ministry accuses existing international financial institutions, such as the IMF, of serving the interests of Western countries at the expense of emerging economies. Russian Finance Minister Anton Siluanov has called on BRICS members to create an alternative to the IMF, reflecting Moscow’s broader goal of reducing Western influence over the global economy.
Moscow’s criticism of the IMF is rooted in its view that the institution’s policies disproportionately favor the United States and its allies. Over the years, many countries in the developing world have expressed frustration with the IMF’s lending conditions and its perceived bias towards Western economic priorities. By advocating for an alternative, Russia hopes to offer emerging economies more equitable financial support and less restrictive lending conditions.
In addition to the payments platform, Russia is also proposing the creation of a “BRICS Clear” platform to settle trade in securities. This would provide an alternative to Western-dominated financial exchanges and clearinghouses, further reducing the group’s reliance on Western institutions. Russia also wants BRICS countries to improve communication between their credit rating agencies and develop a common ratings methodology. However, the proposal stops short of calling for the creation of a joint BRICS rating agency—an idea that had been previously discussed.
Despite Russia’s ambitious proposals, it faces significant obstacles in achieving its goals. The absence of high-level officials from most BRICS countries at a recent preparatory meeting indicates that not all members are fully aligned with Moscow’s vision. Most nations sent only lower-level officials, rather than finance ministers or central bankers, suggesting that Russia may face resistance or skepticism from within the group.
For the summit itself, Russia expects to welcome leaders from all nine BRICS members as well as representatives from about 15 other countries. Saudi Arabia’s foreign minister, for instance, will attend, reflecting the kingdom’s interest in strengthening ties with BRICS. Yet, despite the symbolic importance of the event, Russia will need to work hard to secure concrete commitments from BRICS members to support its proposals.
One of the major challenges to Russia’s payment system proposal is the potential for secondary sanctions. While Russia and China have deepened their economic cooperation in recent years, even Chinese banks have expressed concern about being targeted by U.S. sanctions for doing business with Russia. This highlights the difficulty of creating a truly independent financial system that can operate outside the reach of Western sanctions.
Moreover, building consensus among BRICS members on financial issues may prove difficult. Brazil, India, and South Africa have historically taken more moderate positions in global economic governance and may be hesitant to fully endorse Russia’s proposals, particularly if they perceive risks to their own economies or diplomatic relations with the West.
In addition to financial reforms, Russia is also advocating for a greater role for BRICS in global food security. As the world’s largest wheat exporter, Russia has proposed the creation of a BRICS grain trading exchange, backed by a pricing agency, to provide an alternative to Western bourses that set international prices for agricultural commodities. This initiative is part of Russia’s broader strategy to reduce its dependence on Western-dominated markets and institutions.
A BRICS grain exchange could offer a new avenue for countries seeking to diversify their sources of food and agricultural products, especially as global food supply chains become more vulnerable to geopolitical disruptions. However, establishing such an exchange will require the cooperation of other major agricultural producers within BRICS, such as Brazil, and the development of a credible pricing mechanism that can compete with established markets.
Russia’s efforts to strengthen BRICS as a counterweight to the West are part of a broader strategy to reshape the global economic order. By proposing an alternative payment system, advocating for reforms to global financial institutions, and seeking to expand BRICS’ role in key areas such as food security, Moscow is positioning the bloc as a platform for emerging economies to challenge Western dominance.
However, Russia’s success will depend on its ability to build consensus within an increasingly diverse group of BRICS members. While some countries within the bloc may be sympathetic to Russia’s goals, others may be more cautious, particularly if they have strong economic ties to the West. As BRICS expands and takes on a more prominent role in global governance, its ability to present a unified front on key issues will be critical to its long-term success.
