Please take the effort to understand blockchain before immediately denouncing it. It is useful in extremely specific conditions of low trust between a low number of equal peers. The one special thing about blockchain is that all users keep a ledger, a record of all transactions, and cross-verify it with one another.

In most scenarios, this feature is completely useless and a waste of energy because all users have to spend electricity on verifying random transactions by other people. For example, with you and your bank account, there is no reason to use blockchain because your bank is the one trusted entity and already keeps all the records of your money, so they can just use regular server infrastructure for all their customers. Using blockchain here would be unnecessary; if you did, you, your bank, and all the bank’s other customers would waste energy verifying each other’s transactions.

However, for transactions between nations, there is no one trusted entity because all nations are essentially equal in their trust level, or at least would like to be treated as such. The main problem with the current financial system is that the US has positioned itself (and its puppet the IMF) as the one trusted entity and wields its power indiscriminately and with abandon. Thus to fix this, BRICS must ensure there is no need for one trusted entity in the global financial system, so this is where blockchain comes in.

Basically, the BRICS plan is for every participating nation’s central bank to keep a blockchain ledger, such that when they settle debts and do global transactions between each other, all of the transactions are recorded and verified on every other nation’s central bank blockchain ledgers, so that no one nation can insert a bunch of fake transactions into its ledger to steal money from or attack other nations. Because there are way fewer nations than people in the world, the system physically cannot suffer from the same kind of blockchain inefficiencies of too many users verifying too many transactions simply because there will never be as many users making transactions on the blockchain. Also, because BRIC’s blockchain system is backed and used by nations, the entire system will obviously have much higher security than a random blockchain made by some scammer in their garage.

No matter the inefficiencies of blockchain, the BRICS blockchain system is vastly more efficient than the current financial system of every nation sending their money to a US bank, paying the US bank a transaction fee, and then the US bank sending it to the final destination nation.

Ben Norton made a great video overviewing the comprehensive new financial system Russia is proposing here.

I’m the biggest critic and certified hater of blockchain technology, and I remain extremely skeptical. But this specific implementation of blockchain, I find to be slightly intriguing.

This Ben Norton video is a long watch, but an excellent one if you want to understand what Russia and the rest of BRICS are trying to achieve and why.

1. Please see my post above on why blockchain is useful in this one specific instance.
2. Rather than being reluctant, China is trialing this already via Project mBridge with central banks of Thailand, the United Arab Emirates, and Saudi Arabia. Another term for a multi-nation-backed blockchain system is a multiple central bank digital currency (CBDC) system, so that’s basically what it is.

I 99 percent of the time think that blockchain stuff is horseshit and unnecessary, but I admit this concept interests me.