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BRICS countries (Brazil, Russia, India, China, South Africa) are expanding their members, and trying to build an anti-western coalition.
This question is specific to the BRICS group's initiative under Russian chairmanship to develop an alternative payment system, which has been a point of discussion in light of the increasing use of the dollar and SWIFT system in geopolitical contexts. BRICS has long expressed interest in reducing its reliance on the US-dominated SWIFT system, especially after the West's sanctions on Russia highlighted its vulnerability. The August 2023 BRICS summit in Johannesburg saw the bloc commission its finance ministers to explore a BRICS payment system.
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The possibility of the BRICS countries (Brazil, Russia, India, China, and South Africa) announcing an alternative to SWIFT at their summit in October 2024 has been a subject of considerable interest and speculation. The BRICS nations have indeed been working on developing cross-border alternatives to the U.S.-dominated payment systems like SWIFT, driven by various factors including the desire for non-dollar alternatives and the need to shield themselves from potential U.S. sanctions.
There have been significant developments in this direction, with Russia spearheading the initiative through the creation of its own System for Transfer of Financial Messages (SPFS), which aims to serve as a SWIFT alternative. This system was developed in response to Western sanctions and is intended to prevent Russia from being isolated from the global financial system. Russia has also engaged with other BRICS nations about the joint use of SPFS, and there have been discussions about integrating payment systems and using national currencies for export-import transactions within the BRICS bloc.
Moreover, the finance ministers of the BRICS countries have been tasked with assessing the viability of a unified payments network that would facilitate transactions in local currencies rather than the U.S. dollar. This initiative aims to enhance the independence of the BRICS nations in the global financial arena, with a formal discussion on its strengths expected to take place in the next year's BRICS summit.
While these efforts indicate a strong inclination towards creating an alternative to SWIFT, it's also important to note the challenges such a system would face, including potential resistance from international banks wary of losing access to SWIFT or facing retribution for bypassing sanctions. The complexity of establishing a robust alternative that can compete with SWIFT's global reach and efficiency should not be underestimated.
Given these factors, the announcement of a concrete alternative to SWIFT at the BRICS summit in October 2024 remains uncertain. While the groundwork and intentions are clear, the success of these initiatives will depend on overcoming significant technical, political, and regulatory challenges.
Assessed Odds: Will the BRICS countries announce an alternative to SWIFT at their summit in October 2024?
Odds: 40%
LUCA Says Confidence in odds provided: 60