Putin Announces Development of ‘Independent Payments System’ to Ditch US Dollar: Will it Ba Based on Bitcoin or XRP?

• An independent payment system has been endorsed for BRICS, potentially moving away from the US dollar.
• Speculation arises whether the system will utilize cryptocurrencies like Bitcoin or Ripple’s XRP for international settlements.

In a significant development, Russian President Vladimir Putin has officially approved the progression of an alternative currency strategy for the BRICS group, as reported in an earlier CNF post. This strategic move hints at a major shift towards using Ripple’s XRP for cross-border payments, suggesting a pivot to a more autonomous financial framework.

Announced at the SPIEF 2024 Conference, the new payment system aims to enhance national currency sovereignty and shield against political and sanction influences, leveraging blockchain technology for security and resistance to external manipulation.

Designed to be “fully digital, fair, and cost-effective,” the system focuses on inclusivity for governments, businesses, and the public. Alongside, BRICS nations are boosting banking networks and increasing trade with national currencies, planning to expand the Contingent Reserve Arrangement for diverse currency use beyond the US dollar.

This system is designed to enhance the sovereignty of national currencies and protect them from external political and sanction pressures. Here are the key developments:

1. Blockchain Integration: The proposed payment system is set to harness blockchain technology. This integration highlights a commitment to advanced digital tools, ensuring a robust platform resistant to external manipulations.
2. Focus on Inclusivity and Efficiency: In an interview with the Russian state-owned news outlet TASS, Kremlin aide Yury Ushakov emphasized that the system would be “fully digital, fair, and cost-effective.” This design is aimed at accommodating the needs of governments, businesses, and the general public, prioritizing a politically unbiased framework.
3. Expansion of Banking and Currency Use: Concurrently with the system’s development, there is a focused initiative within the BRICS to boost banking networks and promote trade in national currencies. This initiative includes enhancing the Contingent Reserve Arrangement to diversify currency usage away from the US dollar.

Will it Be Based on Bitcoin or XRP?

The choice of cryptocurrency, whether Bitcoin or Ripple’s XRP, is pivotal due to their transaction efficiency and cost-effectiveness. Currently, Ripple’s XRP is trading at $0.498, having surged by 0.63% in the past day despite a decrease of 4.21% over the past week. This highlights its potential suitability for the system.

These steps represent a significant shift towards economic autonomy for the BRICS, spotlighting their strategic move towards advanced technological financial solutions.