BRICS members Russia and Iran want to abandon the Western-dominated payment messaging system SWIFT. The two countries aim to launch a new payment system as an alternative to the SWIFT mechanism. The sanctioned nations are working towards the formation of a new payment system that will completely get rid of the US dollar for cross-border trade and transactions.
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Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade. SWIFT is controlled by the US making BRICS and other developing countries use the messaging system for financial transactions. The US dollar, Euro, and Pound are the most used currency for settlements around the world. Ending reliance on SWIFT will strengthen local currencies and become the de facto currency for trade.
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BRICS: Russia & Iran Ready To Ditch SWIFT After Launching New Payment System
Russia is working closely with its BRICS counterpart Iran to ditch SWIFT and launch a new payment system for transactions. Details on the formation of the payment mechanism are kept under wraps by the two nations. The work on the financial messaging channel remains confidential until further notice from Russia and Iran.
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“The situation in banking and currency cooperation has significantly improved. At the moment, we are working on a confidential financial messaging channel to completely get rid of SWIFT. I can call 2025 the year in which financial issues in Russian-Iranian relations will be resolved,” said Iranian Ambassador to Russia Kazem Jalali. Other BRICS countries could begin using the new payment system and end their dependency on SWIFT.
The development could usher into a new financial era between Russia and Iran and ditch the Western-dominated payment systems. The BRICS alliance could end up creating an alternative to SWIFT and convince other developing countries to use it. The US dollar will be the hardest-hit currency when the development plays out.
