During Russia’s BRICS chairmanship this year, a proposal was made to create a new cross-border payment infrastructure for members. According to a report presented by Russian Finance Minister Anton Siluanov earlier this month, a multinational payment mechanism — dubbed the BRICS Cross-Border Payment Initiative — could facilitate cross-border payments between BRICS nations, increase the share of national currencies in cross-border settlements and establish interoperability of the group members’ national payment infrastructures.
"While the details and specifics of the BRICS payment system are yet to be made public, the fact of having such a system is already a major breakthrough, as it will provide an alternative to the existing SWIFT system that unfortunately has been largely weaponized by ... the West ... It is therefore inevitable for the newly introduced BRICS payment system to have to stand the test of time to be accepted by more participants, or maybe reformed with the passage of time to be eventually recognized as a worthy replacement for SWIFT," Wong said.
At the same time, although being a non-Western organization, BRICS was not created to oppose the West, the expert added.
"That said ... unless the global economic reality will bring the Western powers to senses and to give up their attempt to continue to seek dominance by imposing sanctions on others, we will still be stuck in a world with two competing camps," Wong said.
The expert added that he disagreed with people who see the use of local currencies for trade settlements as a step backward. With time and effort, the new BRICS payment system can indeed be an alternative to SWIFT, he said.
According to a joint declaration adopted by the BRICS leaders on Wednesday, they encourage the strengthening of correspondent banking networks within BRICS and the enabling of settlements in local currencies in line with the voluntary and non-binding BRICS Cross-Border Payments Initiative and look forward to further discussions in this area.
The BRICS summit was held in Russia's Kazan from October 22-24.