BRICS Pay - Another Effort to Bypass the US Dollar

A thank you to a reader for alerting me to this article on Silkroadbriefing.com that explains the new cloud based BRICSPay system. The article points out that this system being installed for use in the BRICS nations is another effort to bypass both the US dollar and also the US banking system. 

Below are a few excerpts from the article followed by a few added comments.

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"The BRICS grouping of countries, Brazil, Russia, India, China and South Africa are creating a single payment system, BRICS Pay, as part of the drive to establish a common system for retail payments and transactions between the member countries.

These nations, all among the worlds leading and most powerful emerging markets, plan to introduce a special cloud platform, which will connect their national payment systems. An online wallet will be developed with access to these payment systems, which will also include mobile apps similar to Apple Pay, which can be installed on smartphones for purchases in any of the five BRICS countries, regardless of which currency the payment and the money in the account of the buyer are denominated in.

This means that nationals of Brazil, Russia, India, China and South Africa will be able to use their own national currencies as a direct basis of exchange for external payments. This is being seen as a major step on the path to de-dollarization and a de-coupling from the current US controlled global banking system."

. . . .

"In order for settlements in national currencies to bypass the dollar, the People’s Bank of China will open lines for currency swaps to partner banks to support the exchange trade in yuan in regional currency markets. Similar lines will be opened by the central banks of Brazil, Russia, India and South Africa. In these instances, a settlement mechanism based on a basket of currencies of the BRICS countries and a separate financial infrastructure will appear. This, in turn, will support the diversification of the global financial system and currency multi-polarity. BRICS Pay, as a contactless transfer system, will give the citizens of the BRICS countries a convenient means of conducting transactions."

Please click here to read the full article on silkroadbriefing.com

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My added comments: The use of sanctions by the US government has created a predictable response around the world. Nations wary of get caught up in the problems associated with US sanctions are working an a variety of creative ideas to try and bypass the US centered banking system and the US Dollar.

The process so far has been very slow and gradual, but we do see that it continues to grow and there is no reason to think it will not continue to do so. We continue to monitor these kinds of efforts and report on them when information is available.


Added notes 8-23-19: Russia's Rosneft to switch from US dollars to Euros for oil contracts.

"Russia’s Rosneft (ROSN.MM), one of the world’s top oil producers and exporters, has notified customers that future tender contracts for oil products will be denominated in euros not dollars, five trading sources told Reuters."

Also, The Economist runs an article questioning what will come after Bretton Woods II which we covered here.