MARKET NEWS

LONDON, Oct 30 (Reuters) – BRICS+ countries should press ahead with a joint cross-border payments mechanism to reduce their reliance on the US dollar, although establishing a shared currency would face significant economic and institutional obstacles, according to a think tank report published on Friday.

The report, released by non-profit policy platform BRICS+ Thinking, urged the expanded grouping of major emerging economies, led by Brazil, Russia, India, China and South Africa, to commit to developing the payments mechanism and take the necessary steps to ensure its implementation.

The authors, Gregory T. Chin, Danny Quah and former Goldman Sachs economist Jim O'Neill, who coined the BRICS acronym, stressed the importance of central bank support and the establishment of the technical infrastructure required to make the system operational.

Cross-border payments have long featured on the BRICS agenda, although efforts to integrate the financial infrastructure of member countries have made limited progress.

In a declaration following their September summit in India, BRICS leaders pledged to continue working towards faster and cheaper cross-border payments, including through the linking of national payment systems and greater use of local currencies.

Shared Currency Faces Significant Challenges

While a common payments mechanism is considered achievable, introducing a shared BRICS+ currency would require extensive economic and institutional reforms across member countries.