The 16th Annual BRICS Summit, 2024, has kicked off in Kazan, Russia, today. In the summit hosted by Russia, several powerful world leaders, including Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, and Chinese President Xi Jinping, will participate. The summit is very crucial for Russia, as it faces severe economic sanctions from the West.

A recent report claimed that Russia wants to showcase its geo-political and economic strength against the West through the BRICS summit. Many believe that, during the summit, Russia will present a proposal for creating an alternative financial system and payment network using blockchain technology. 

BRICS Summit 2024: Why Is It Important?

BRICS, though originally a union of five rapidly growing economies, including Brazil, Russia, India, China, and South Africa, now has nine members, as Egypt, Ethiopia, Iran, and UAE have joined the group recently. Saudi Arabia, which is also an invitee to the current summit, is expected to join the union in near future. 

To understand the strength of this union, you only have to analyse these two factors: population and economic strength. This union represents at least 45% of the global population and nearly 28% of the global economy. 

Russia’s Plan for a New Financial System 

The latest summit, as said earlier, is particularly significant for Russia, as it intends to challenge the dominance of Western-backed institutions like the IMF through BRICS. In this meeting, Moscow is likely to push for the creation of a blockchain-backed digital token system backed by national currencies. This system could challenge the dominance of the US dollar in the global economy, as it would allow BRICS countries to conduct payments without relying on the USA’s currency.

For Russia, it is a political, as well as economic, strategy to bypass the economic sanctions imposed against it by the West following its invasion of Ukraine. 

If such a payment system is created, it may not be easy for the Western powers to disrupt Russia’s business relations with BRICS nations. 

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How Will This Impact the Crypto Market?

With BRICS countries seeking alternatives to the dollar, cryptocurrencies could become more important as cross-border payment tools. A new BRICS-backed digital token system could also accelerate the wider adoption of blockchain technology, creating opportunities for crypto-based payment networks. 

In short, as the BRICS nations explore alternatives to Western-dominated financial systems, the global economy – and the cryptocurrency market – could see significant shifts.

Stay tuned to Coinpedia for the latest updates on global economic developments! 

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