As published by Dr Paballo Ntobaki in African Times
The BRICS nations are constructing a fresh model for cross-border e-commerce. Through initiatives like the BRICS Pay System and a proposed independent financial infrastructure, BRICS is moving beyond merely participating in the global economy.
Become an insider. Subscribe to our newsletter for more top trending stories like this!
BRICS Pay: secure, cost-effective solution for global digital trade
The 14th BRICS Trade Ministers Meeting in July 2024 affirmed this direction, recognising that “E-commerce has become one of the most important drivers of global economic growth.” With the aim to expand its presence in global e-commerce through a robust, secure, and regionally integrated system, harnessing both B2B and B2C trade, BRICS seeks to make digital trade a powerful tool for economic growth and innovation within the group.
The Kazan Declaration 2024 indicates that the BRICS countries can trade directly in their own currencies. The declaration states, “We reiterate our commitment to enhancing financial cooperation within BRICS […] We welcome the use of local currencies in financial transactions between BRICS countries and their trading partners.”
This shift is transformative for Micro, Small, and Medium-sized Enterprises (MSMEs) within BRICS. The 2023 Johannesburg Declaration highlighted “the crucial role that MSMEs play in unlocking the full potential of BRICS economies.” BRICS Pay opens the door for MSMEs to engage in cross-border trade more freely, enabling smaller businesses to access international markets. BRICS’ vision seeks to build a secure and trusted digital marketplace. As the Kazan Declaration asserts, “We are resolved to further increase trust in e-commerce and ensure full-fledged protection of the rights of e-commerce parties.”
BRICS is embedding transparency, security, and consumer rights protections into its e-commerce framework. This commitment to building trust from the outset makes cross-border e-commerce safer, giving businesses and consumers alike the confidence to engage in digital trade.
BRICS Clear: the future of cross-border settlements in digital trade
Become an insider. Subscribe to our newsletter for more top trending stories like this!
One of the most groundbreaking aspects of BRICS’ strategy is its plan to create an independent financial infrastructure. According to the Kazan Declaration, BRICS is examining “the feasibility of connecting BRICS countries’ financial markets infrastructure […] an independent cross-border settlement and depositary infrastructure, BRICS Clear.” which is the cornerstone of an independent network where BRICS countries can settle transactions directly.
This infrastructure allows BRICS nations to control their own trade flows, free from the constraints and fees. BRICS Clear creates a foundation for independent trade that empowers BRICS members to take charge of their economic future while setting an example for emerging markets seeking economic independence.
Supporting this vision is the New Development Bank (NDB), which underpins BRICS’ ambitions by providing local currency financing and investment tools which enables BRICS to fund its initiatives internally, strengthening its economic framework. The NDB ensures that BRICS can prioritise regional growth and build resilience from within.
BRICS’ proves that independent financial systems can operate successfully alongside established ones, showing that there is room for multiple cooperative frameworks in the global economy.
This article has been published in partnership with African Times.
Become an insider. Subscribe to our newsletter for more top trending stories like this!
