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BRICS and SCO move towards a unified payment system

BRICS and SCO move towards a unified payment system

GrafaGrafa2024/10/29 17:00
By:Mahathir Bayena

The Shanghai Cooperation Organization (SCO) is progressing discussions on a unified payment system among its member states to enhance the use of national currencies in cross-border transactions. 

SCO Secretary-General Zhang Ming shared details about the initiative in an interview, indicating that discussions are ongoing, and work is focused on increasing the share of national currencies in settlements.

Zhang mentioned, "The discussion on creating a single payment system is currently in progress in an informal format. At the moment, work is being done to increase the share of national currencies in mutual settlements." 

He also referenced the 2022 Samarkand Summit, where a concept to promote these efforts was adopted.

Established in 2001, the SCO is an alliance focused on security, economic cooperation, and political stability among its Eurasian member countries, including China, Russia, and India. 

This initiative aligns with similar efforts within BRICS, as both organisations aim to reduce Western economic influence and promote a multipolar world.

To facilitate the payment system’s development, a specialised working group has been formed with representatives from each member state’s central banks and finance ministries. 

Additionally, non-governmental entities, including the SCO Interbank Consortium, are playing a role in advancing the project. 

Despite facing challenges in political coordination, Zhang expressed confidence in the ongoing progress.

The Secretary-General emphasised the importance of enabling a free flow of capital, technology, and services to foster economic cooperation within the SCO.

Meanwhile, BRICS is pursuing similar goals with discussions centered on reducing dependence on the U.S. dollar and boosting trade in local currencies. 

During the recent summit, the group explored the development of an alternative payment system and the possible introduction of a common digital currency.

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