BRICS Pay by New Development Bank (NDB)
The BRICS payment system, often referred to as BRICS Pay, is a strategic initiative aimed at facilitating cross-border transactions among the member countries of the BRICS economic bloc, which includes Brazil, Russia, India, China, and South Africa. This system is designed to reduce reliance on traditional financial networks like SWIFT, particularly in light of geopolitical tensions and sanctions that have prompted these nations to seek alternative financial solutions.
Objectives
The primary objectives of BRICS Pay include:
Structure and Technology
Model and Infrastructure
BRICS Pay operates on a decentralized model utilizing blockchain technology, which enhances security and transparency in transactions. The system includes features such as:
Governance and Regulation
The governance of the BRICS payment system is primarily managed through the New Development Bank (NDB), which acts as the central hub for processing financial transactions among member countries. Each member country's financial institutions, such as banks and payment service providers, are expected to integrate with the BRICS Pay system to facilitate cross-border payments.
Market Size and Adoption
As of recent reports, there is significant interest in the BRICS payment system, with claims that 159 countries are considering its adoption. This reflects a growing trend among nations seeking alternatives to the Western-dominated financial systems, especially in response to sanctions and economic pressures.
The market potential for BRICS Pay is considerable, given the large populations and economies of its member countries. The system aims to tap into the burgeoning e-wallet and digital payment markets, which are increasingly popular in regions like Southeast Asia and among underbanked populations in BRICS nations.
New Development Bank (NDB)
The New Development Bank (NDB) is a multilateral development bank established by the BRICS countries (Brazil, Russia, India, China, and South Africa) in 2015. The bank aims to support infrastructure and sustainable development projects in BRICS and other emerging economies.
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Shareholding Structure
The initial authorized capital of the New Development Bank (NDB) is $100 billion, divided into 1 million shares, each valued at $100,000. The initial subscribed capital is $50 billion, with this amount equally distributed among the founding members. Each country holds 100,000 shares, representing a 20% share of the total subscribed capital.
Brazil has subscribed to 100,000 shares, with exercisable votes equal to 100,000, corresponding to a subscribed capital of $10 billion, or 20% of the total.
Russia has also subscribed to 100,000 shares, with exercisable votes equal to 100,000, contributing $10 billion to the subscribed capital, which is 20% of the total.
India's subscription follows the same pattern, with 100,000 shares and 100,000 exercisable votes, making up $10 billion, or 20% of the subscribed capital.
China holds 100,000 shares, equal to 100,000 exercisable votes, with a subscribed capital of $10 billion, representing 20% of the total.
South Africa, like the other founding members, has subscribed to 100,000 shares, with 100,000 exercisable votes, contributing $10 billion to the subscribed capital, accounting for 20% of the total.
Financials and Market Size
As of December 31, 2022, the NDB had cumulatively approved $32.8 billion for 96 projects. The bank's portfolio stood at $29.1 billion for 74 projects as of December 31, 2021. In 2021, the NDB approved ten new loans totaling $5.1 billion, bringing the cumulative approvals to over $30 billion since the bank's inception. The bank has maintained high credit ratings and actively accessed international and domestic capital markets, raising a record amount of over $5.5 billion in various currencies in 2021.
Infrastructure and Locations
The NDB is headquartered in Shanghai, China. It has established regional offices in Johannesburg, South Africa; S?o Paulo, Brazil; GIFT City, India; and Moscow, Russia. In May 2022, the NDB set up a regional office in Gujarat, India, to finance and monitor infrastructure projects in India and Bangladesh. The bank supports public or private projects through loans, guarantees, equity participation, and other financial instruments. It cooperates with international organizations and other financial entities to provide technical assistance for the projects it supports.
Disclaimer for BRICS Payment System
The information presented in this article regarding the BRICS payment system, also known as BRICS Pay, is for informational purposes only. While efforts have been made to ensure the accuracy and reliability of the content, the author and associated entities do not guarantee its completeness or correctness. Readers are advised to conduct their own research and consult with financial professionals before making any investment or financial decisions based on the information provided. The BRICS Pay system is subject to regulatory changes and market fluctuations that may affect its operation and effectiveness.
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Freelance Writer, Visionary, Peace Activist, ESL Teacher
5 个月Thank you! I appreciate all the details that you have set forth here because I am absolutely fascinated by BRICs ambitious plans to introduce an alternative to the Western financial system, which has been weaponized with asset seizures and levying tariffs and sanctions.