BRICS Leaders Push for Local Currency Network, Diminishing US Dollar Role

BRICS leaders have declared their commitment to a local currency payment network designed to revolutionize cross-border transactions and reduce reliance on the U.S. dollar.

BRICS Leaders Commit to a Groundbreaking Local Currency Payment Network

At the 16th BRICS Summit in Kazan, Russia, BRICS leaders underscored their commitment to advancing a more integrated financial system across member countries, with a focus on local currency transactions and cross-border payment structures.

“We reiterate our commitment to enhancing financial cooperation within BRICS. We recognise the widespread benefits of faster, low cost, more efficient, transparent, safe and inclusive cross-border payment instruments built upon the principle of minimizing trade barriers and non-discriminatory access,” the declaration released on Thursday details, adding:

We welcome the use of local currencies in financial transactions between BRICS countries and their trading partners.

“We encourage strengthening of correspondent banking networks within BRICS and enabling settlements in local currencies in line with BRICS Cross-Border Payments Initiative (BCBPI), which is voluntary and nonbinding, and look forward to further discussions in this area, including in the BRICS Payment Task Force,” the declaration continues.

The New Development Bank (NDB) was highlighted as a pivotal entity in supporting infrastructure and sustainable development. “We recognize the key role of the New Development Bank (NDB) in promoting infrastructure and sustainable development of its member countries,” BRICS leaders stated, expressing support for “the NDB in continuously expanding local currency financing and strengthening innovation in investment and financing tools.” With the NDB General Strategy for 2022-2026 underway, the leaders affirmed a need for strengthened corporate governance within the bank to meet evolving financial demands across the BRICS network.

BRICS leaders also welcomed the role of the Interbank Cooperation Mechanism (ICM), noting, “We welcome the BRICS Interbank Cooperation Mechanism (ICM) focus on facilitating and expanding innovative financial practices and approaches for projects and programmes, including finding acceptable mechanisms of financing in local currencies.” Additionally, they stated:

We task our finance ministers and central bank governors, as appropriate, to continue consideration of the issue of local currencies, payment instruments and platforms and report back to us by the next Presidency.

This emphasis on collaborative financial structures underscores BRICS’ ambitions for a resilient, interconnected financial network that supports the growth and stability of emerging markets.