😠 Cross-border payments in BRICS: Is SWIFT in danger?

😠 Cross-border payments in BRICS: Is SWIFT in danger?

The recent proposal for a "multicurrency system" aims to reduce BRICS countries' dependence on the dollar. This shift, beyond its macroeconomic implications, is a game-changer for the international payments industry.

➡️ BRICS members are planning to adopt distributed ledger technologies (DLT), creating an international platform called BRICS Pay, which will enable token-based transactions. The main advantage of this system is the elimination of credit risk associated with traditional banking methods.

➡️ The plan also includes the direct exchange of commodities like oil, natural gas, grains, and gold, strengthening economic cooperation.

➡️ According to a report by Russia's Ministry of Finance, the Central Bank of Russia, and the consultancy firm "Yakov & Partners," DLT technology will cut processing times and costs by eliminating banking intermediaries and compliance checks. It's estimated that if half of cross-border transfers are conducted through this new scheme, BRICS nations could save up to $15 billion USD annually.

➡️ And what about SWIFT? Although it currently connects 11,500 financial institutions worldwide, by January 2025, SWIFT will launch an advanced AI-based fraud detection system. This system will use pseudonymized data from billions of transactions to identify suspicious activities in real-time. After successful pilots in banks across Europe, North America, Asia, and the Middle East, the project is set to roll out. Meanwhile, BRICS Pay is still under development.

➡️ Additional fact: This year, BRICS welcomed new members like Egypt🇪🇬, Ethiopia🇪🇹, Iran🇮🇷, Saudi Arabia🇸🇦, and the United Arab Emirates🇦🇪.

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