BRICS challenging dollar with no need for common currency so far

Uriel Araujo, Anthropology PhD, is a social scientist specializing in ethnic and religious conflicts, with extensive research on geopolitical dynamics and cultural interactions.

As the BRICS summit approaches in New Delhi next month, the bloc is moving steadily beyond rhetoric on financial cooperation. According to Sanjay Malhotra, the Governor of the Reserve Bank of India, member countries are discussing ways to link their instant payment systems and central bank digital currencies, or CBDCs, to make cross-border transactions faster and cheaper.

The idea sits among several options under debate and remains at an early stage, yet it points to a practical effort to reduce reliance on traditional channels dominated by the US dollar and Western infrastructure.

BRICS has long talked about greater use of national currencies in trade. What is different now is the focus on concrete technical links. Brazil’s Pix, India’s Unified Payments Interface, and similar systems in other members already process enormous volumes domestically. Connecting them could facilitate cross-border payments in local currencies while reducing the need for multiple intermediaries and potentially lowering transaction costs.

CBDCs offer another route, potentially enabling faster and more direct cross-border settlement between participating financial institutions and central banks. As a matter of fact, India has already built cross-border payment ties with the UAE and is exploring similar arrangements with other partners.

Iran has added its own proposal to the mix: Central Bank Governor Abdolnasser Hemmati called for a dedicated BRICS “financial corridor” and the integration of national payment networks. He argued that linking these systems and expanding the use of national currencies would cut reliance on external financial channels, raise transaction speed, lower costs, and improve security for trade among members. Iran has already begun examining the technical, legal, and operational aspects and stands ready to help draft a roadmap.

Washington is watching closely. US officials for one thing have flagged the Brazilian Pix as a concern, citing it in trade disputes and arguing that it disadvantages American payment providers.

Brazil’s Pix, launched in 2020, has become one of the world’s most successful instant-payment platforms, used by roughly 80% of the population and accounting for more than half of all payment transactions in Brazil. Moreover, the Brazilian Central Bank has signed cooperation agreements with dozens of countries interested in replicating the model.

Unsurprisingly, the success of a public, low-cost system draws attention - when Western private card networks have long dominated international payments.

The broader context to these developments includes the growing weight of the Global South in the world economy and the search for alternatives to a system that has proven vulnerable to sanctions and political pressure.

As I’ve recently noted, US record debt levels have now surpassed $40 trillion. Combined with the use of dollar-centered financial infrastructure as a tool of economic sanctions, this creates additional incentives for other countries to develop parallel payment and settlement arrangements - a dynamic that can also be understood in the context of the so-called Triffin Dilemma.

The broader “BRICS Pay” concept, aimed at facilitating interoperability among national payment systems, fits into this pattern. It aims to facilitate direct cross-border settlement without necessarily relying on the dollar as an intermediary currency or on Western-dominated financial messaging infrastructure such as SWIFT - a system notoriously vulnerable to weaponizable or geopolitically-motivated sanctions.

On that point, it suffices to highlight, for one thing, how a number of major Russian banks have been barred from using SWIFT, over the its campaign in Ukraine, whereas Israeli institutions have not - despite UN reports on genocide amid Israel’s operations in Gaza.

In any case, the effort is pragmatic rather than “revolutionary” or anti-Western. India, which holds the BRICS presidency this year, has framed the discussion around cost reduction and efficiency rather than open confrontation with the dollar system.

The summit is reportedly more likely to advance payment linkages than to declare a full-scale de-dollarization campaign. Be that as it may, even incremental steps matter. Linking systems that already work at scale can gradually shift trade patterns, especially among members that account for a substantial share of global GDP (measured by purchasing power parity).

Thus far the discussions have stayed largely technical. Options include bridges between fast payment networks and interoperability among CBDCs. No common infrastructure has been approved, and timelines remain open. Yet the direction is clear enough. Countries that once accepted the costs and delays of dollar-mediated trade are exploring routes that would keep more of the process under their own control.

In doing so, they can strengthen monetary sovereignty without needing to come up with a single BRICS currency overnight.

Assessments from within the bloc note that dependence on external systems carries risks. Sanctions, restricted access, and rising transaction costs have certainly pushed members to look inward for solutions.

These shifts suggest that the current international financial architecture is not the only workable option for emerging economies

Underreported in much of the Western press is just how quickly practical cooperation is advancing on the ground - from bilateral payment links to multilateral proposals like Iran’s financial corridor idea.

The September summit in New Delhi will therefore test how far these talks can move from discussion to further commitments. Finance ministers and central bank governors are expected to refine proposals beforehand.

Whether the outcome is a formal BRICS Pay framework or a series of bilateral and plurilateral connections, the underlying trend continues. In the context of an expanding BRICS+ grouping, member nations are building the tools to settle more of their trade on their own terms. In a world where financial infrastructure doubles as geopolitical leverage, that is a significant development, with implications that are only beginning to unfold.