BRICS Summit 2024: Nations Eye Blockchain to Challenge US Dollar Dominance

The 16th Annual BRICS Summit has officially started today in Kazan, Russia, gathering some of the world’s most influential leaders. Key figures like Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, and Chinese President Xi Jinping are participating in this important event. The summit is especially crucial for Russia, which is facing significant economic sanctions from Western countries.

Read more about this below.

Russia’s Strategic Goals

Recent reports suggest that Russia plans to use the BRICS Summit to showcase its geopolitical and economic strength against the West. Analysts expect that Russia will propose the creation of an alternative financial system and payment network using blockchain technology during the talks.

Originally made up of five fast-growing economies—Brazil, Russia, India, China, and South Africa—BRICS has expanded to include nine member nations, with Egypt, Ethiopia, Iran, and the UAE joining recently. Saudi Arabia, currently invited to the summit, is expected to become a formal member soon.

Why Brics Matters

To understand the importance of this coalition, consider two key factors: population and economic power. Together, BRICS represents about 45% of the global population and nearly 28% of the world’s economy.

This summit is particularly significant for Russia as it seeks to challenge the dominance of Western-backed institutions like the International Monetary Fund (IMF) through BRICS. Moscow is likely to push for a blockchain-based digital token system backed by national currencies. This system could weaken the US dollar’s influence, allowing BRICS nations to conduct transactions without relying on American currency.

Navigating Economic Sanctions

For Russia, this initiative serves both political and economic purposes, aiming to bypass the sanctions imposed by the West after its invasion of Ukraine. If successful, this new payment system could make it harder for Western countries to disrupt Russia’s trade relationships with BRICS nations.

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The Rise of Cryptocurrency

As BRICS countries look for alternatives to the dollar, cryptocurrencies may become more important for cross-border payments. A BRICS-backed digital token system could also boost the adoption of blockchain technology and create opportunities for crypto-based payment networks.

In summary, as the BRICS nations explore alternatives to Western-dominated financial systems, we could see significant changes in the global economy and the cryptocurrency market.

Is the world ready for a BRICS-backed digital currency? We’d love to hear your perspective.