Russia BRICS Bridge eyed for cross-border payments with China, Gulf countries

Russia is reportedly readying itself to pivot to using digital currencies to settle international transactions with its allies amid economic sanctions.

Sputnik International reported that the Bank of Russia is ready to begin initial testing with China and the countries making up the Eurasian Economic Union (EAEU). The EAEU comprises Belarus, Kazakhstan, Armenia, Kyrgyzstan, and Russia.

Russian Finance Minister Anton Siluanov disclosed that Russia is eyeing new digital currency-backed settlement alternatives with the oil-rich Gulf nations. While Siluanov’s comments did not mention any nations in particular, analysts expect the United Arab Emirates (UAE) to form part of the initial testing, given its previous work with digital currencies.

Siluanov disclosed Russia’s ambitions at a gathering of finance ministers and central bank governors of BRICS nations in Sao Paulo, Brazil. Russia is currently the chair of the BRICS bloc, and its top priority is a departure from the U.S. dollar as the de facto trade currency.

Russia is exploring several options in concert with other BRICS nations, including the prospects of central bank digital currencies (CBDCs), local fiat currencies, stablecoins, and other forms of digital currencies.

Siluanov notes that Russian officials will be keen on constructing a BRICS Bridge system designed to operate as a multilateral digital settlement platform. Although details for the BRICS Bridge are slim, there are speculations that it will involve interlinking CBDC and financial messaging systems.

“We propose creating a BRICS Bridge system, which, based on the BRICS institutions, would be available to our countries and would ensure the proper level of equality and would contribute to the development of trade relations,” said Siluanov.

The proposed system draws inspiration from the Bank for International Settlements (BIS)-backed mBridge platform, with China and the UAE already recording initial successes.

Russia has previously dabbled with the prospects of digital assets for cross-border transactions, with several leading financial institutions launching pilots despite the government’s stiff opposition to their use for domestic transactions.

A new world order

Siluanov opines that the global financial order is undergoing a seismic shift, with emerging economies demonstrating more potential than G7 nations in recent years. Aware of the changing dynamics, the finance minister alleges that Western powers are trying to scuttle the growth of emerging economies.

“This transformation is not straightforward,” said Siluanov. “We see what restrictions and sanctions are trying to restrain China and Russia – these are the consequences of the paradigm shift.”

Russia says it will improve the economic interests of BRICS members as chairman of the bloc.

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