BRICS Leaders Consider Bitcoin for Trade to Sidestep Western Sanctions

Key Takeaways:

• BRICS leaders explored alternatives like Bitcoin to reduce reliance on the U.S. dollar in trade.
• The 2024 BRICS summit emphasized de-dollarization through CBDCs and blockchain-based BRICS Pay solutions.
• Russia, China, and Iran advocated a new financial system using crypto and digital platforms.

World leaders at the BRICS summit in Kazan, Russia, introduced a strategic plan to counter Western sanctions using Bitcoin. They called on Russian miners to sell their Bitcoin to international buyers, enabling countries to conduct trade without relying on traditional financial systems. 

Related: Russian President Putin Signs Law Legalizing Cryptocurrency Mining

BRICS leaders aim to create a new way to facilitate global trade despite economic restrictions by using Bitcoin and other cryptocurrencies for imports.

BRICS Plan to Boycott U.S. Dollar Reliance and Technology Sanctions

On October 23, Matthew Sigel, Head of Digital Assets Research at VanEck, shared details about the discussions at the BRICS Summit. 

This entailed how U.S. sanctions have severely impacted Russia’s economy, making traditional financial systems, heavily reliant on the U.S. dollar, less accessible.

As the BRICS Summit Kicks Off, Top Lawmakes Are Pushing the Idea that Russian Miners Could Sell Their #Bitcoin to International Buyers, Who Would Use BTC and Other Crypto to Pay for Imports, Effectively Bypassing Western Sanctions.

🧵 pic.twitter.com/AyI8Km64Y1

— matthew sigel, recovering CFA (@matthew_sigel) October 23, 2024

BRICS is an economic alliance of five major emerging economies: Brazil, Russia, India, China, and South Africa. Formed to promote economic cooperation, political dialogue, and global influence, the group seeks to challenge Western-dominated institutions like the International Monetary Fund (IMF) and the World Bank.

Russian President Vladimir Putin took the stage during the summit to address the issue of the U.S. dollar being used as a political tool. He argued that the dollar had become a weapon, stating that nations must seek other alternatives if access to the global currency is denied. 

Chinese President Xi Jinping echoed this view, calling for a transformation of the international financial system. He stressed that the current system no longer reflects the global economic shifts, with emerging powers like BRICS deserving a more prominent role. 

JUST IN: 🇨🇳 Chinese President Xi Jinping says BRICS must promote a new financial system.

"There is an urgent need to reform the international financial architecture, and BRICS must play a leading role in promoting a new system that better reflects the profound changes in the… pic.twitter.com/dXFoZ1Rhil

— BRICS News (@BRICSinfo) October 23, 2024

Putin and Xi’s statements indicate a shared vision among BRICS leaders to explore new financial strategies, potentially turning to cryptocurrencies and alternative systems to bypass the U.S. dollar.

As part of this de-dollarization strategy, Russia has been working on creating a payment and settlement infrastructure that would allow it to operate outside of the Swift system. 

This initiative is one of the concrete proposals expected to come from the summit, marking a major shift in how these nations conduct international trade and financial transactions. 

Putin spoke about plans to create an independent payment and settlement circuit for BRICS:

As part of our cooperation with the BRICS countries, we are working on creating our own payment and settlement system, which will create conditions for efficient and independent servicing… pic.twitter.com/hRlhhLDejv

— News Collection (@NewsArticleColl) September 26, 2024

Bypassing traditional payment networks would enable a country like Russia to evade Western sanctions following its invasion of Ukraine.

In a related development, Russia’s BitRiver and the Russian Direct Investment Fund (RDIF) announced a new BRICS-wide mining initiative. This is designed to establish cryptocurrency and AI data centers across BRICS member nations, providing the computing power to support these emerging technologies. 

The development is a strategic move designed to strengthen the group’s technological infrastructure while reducing its reliance on Western technology and sanctions.

Senator Believes BRICS Currency Plan May Boost US Dollar

In a recent interview with Fox Business, U.S. Senator Bill Hagerty (R-TN) raised concerns about the growing efforts by BRICS nations to reduce their reliance on the U.S. dollar. 

As a member of both the Senate Banking and Foreign Relations Committees, Hagerty acknowledged that BRICS leaders’ push to bypass the dollar could ultimately backfire. 

Instead of weakening the dollar’s global standing, he argued that this move could strengthen its position as the world’s reserve currency.

Hagerty pointed out that the U.S. should seize the moment by implementing a solid regulatory framework, while policies boosting demand for U.S. treasuries and stablecoins would reinforce the dollar’s dominance in global markets.