A common feature that unites these five countries – 

a constantly growing economy.

BRIC is an acronym for the developing nations of Brazil, Russia, India, and China – countries believed to be the future dominant suppliers of manufactured goods, services, and raw materials by 2050. As of 2010, South Africa joined the group, which is now referred to as BRICS.

BRICS is not a formal structure, rather it  is  a  “club”  on   a  world  scale,  within  which developing countries exchange experience, develop joint projects,  assist  each other, both material and consulting.

The BRICS Bank Strategy for 2018-2021

The  New  Development  Bank  (NBD),  popularly  known as the Bank of BRICS, was  founded  in  2014  and  officially launched  the  following  year.  The institution has authorised capital  of  US$ 100 billion  and  can  make  annual  loans  of  up  to  US$ 34 billion and aims to  stimulate  the  development  of  emerging  countries. The  financial  contribution  and  voting  power  of  each  member  country  are  divided  equally. The  Bank’s  headquarters  is  in Shanghai, China.

The construction of infrastructure for sustainable development consists of the main execution axis, receiving            two-thirds of the funds available. The strategic plan involves five thematic areas:  1)   clean   energy;  2)   irrigation,   water   management,   and   sanitation; 3)  transportation  and  logistics; 4)  sustainable  urban  development,  and  5) cooperation and integration among member countries. The institution intends to gradually open its structure for the participation of new members, aiming at a greater geographic and cultural diversity.

Of the seven projects and loans made to date, only one is not from the renewable energy area.  It is intended to expand the project network to 75 by the year 2021, each with an average value of US$ 200 million. The first bonds issued by the NBD were demonstrated in the Chinese currency (Yuan-RenmmM), contributing to the process of internationalization of the same. The institution already has a partnership with the World Bank and intends to expand its network to induce other multilateral banks.

BRICS countries to create own payment system to cut dependence on USD

The five major emerging economies – Brazil, Russia, India, China, and South Africa – are developing a joint new payment system called BRICS Pay.

BRICS countries want to create a special online wallet to integrate the payment systems of its five member states, with Russia’s wealth fund reportedly working on the project alongside its partners from China and India, who have the necessary technologies to launch the system.

The service will be similar to existing Apple Pay and Samsung Pay, allowing users to pay with a smartphone app no matter what currency the customer’s account is linked to. A special cloud platform is to be created to link BRICS countries’ national payment systems.

BRICS own payment system is to significantly reduce the dependence on transnational payment organizations, which is especially important amid geopolitical tensions considering SWIFT is based in Belgium, but its board includes executives from American banks with US federal law allowing the administration to act against banks and regulators across the globe. Consequently, the integration of the national payment systems is a top priority for the bloc given financial market volatility and the dollar rate.

Central banks of BRICS countries have been working on developing a joint payment space, and excluding South Africa, have their own domestic national payment systems – China has UnionPay, India developed RuPay and Brazil has ELO. Instead of SWIFT, the financial messaging system SPFS will work as a “gateway” that facilitates cross-border payments between 11,000 financial institutions in more than 200 countries worldwideIn this sense, several states, including the EAEU (Eurasian Economic Union) countries and foreign banks are willing to join as an alternative to the traditional SWIFT sy  stem. The first transaction on the SPFS network involving a non-bank enterprise was made in December 2017.