BRICS unveils its revolutionary payment system: Soon the end of the dollar monopoly?

At the BRICS Business Forum, the nations of this emerging alliance unveiled their brand new cross-border payment system: BRICS Pay. This initiative constitutes a clear desire to reduce dependence on the American dollar, a currency that is still predominant in global transactions. As BRICS seeks to emancipate itself from the financial influence of the United States, the creation of an autonomous payment system could well redefine the rules of international trade.

A response to dollar dominance

For several years, BRICS member countries have been striving to find an alternative to the US dollar in their international trade. The launch of BRICS Pay is part of this dedollarization strategy, particularly supported by Russia and China. Indeed, during the official announcement, Valentina Matviyenko, President of the Russian Federation Council, clearly expressed this desire: “BRICS Pay is no longer a simple idea, it is a concrete project which is progressing quickly”. The objective is to reduce the influence of the dollar, which still represents 58% of international payments outside the euro zone in 2022. This domination of the dollar, coupled with the economic sanctions imposed by the United States on countries like Russia, has strengthened BRICS determination to establish a more resilient cross-border payment system.

The new system relies on financial infrastructures already installed in each country, such as the Mir network in Russia or the Unified Payments Interface (UPI) in India. Thanks to the compatibility of systems within the same platform, BRICS aims to facilitate transactions without going through traditional financial circuits dominated by the West. Russian Finance Minister Anton Siluanov also emphasized that BRICS Pay would be “based on advanced technologies, which allows faster and cheaper foreign trade transactions without external interference.” A first public demonstration took place this week in Moscow, and foreshadows what this alternative to SWIFT could become.

A solution based on blockchain and beyond

In addition to freeing itself from the dollar, BRICS Pay could also redefine the international payments landscape through the integration of blockchain. According to available information, the BRICS cross-border payment system could use this technology to validate transactions, thus ensuring fast, transparent and secure exchanges between member nations. Russian Minister Anton Siluanov said the system would “leverage blockchain to validate transactions and ensure efficient payments between countries.” This would allow BRICS to reduce costs linked to international trade, with a view to emancipating themselves from the monopoly exercised by traditional platforms such as SWIFT.

In addition, this technological advancement also opens the door to interesting perspectives. Through the creation of a decentralized payment ecosystem, BRICS Pay could not only be adopted by member countries, but also serve as a model for other nations seeking to reduce their dependence on the United States and of the West. The project could also evolve to integrate a digital wallet capable of managing various blockchain networks and bank accounts, to make it even easier to manage cross-border transactions. However, the success of BRICS Pay will depend on its ability to establish itself as a credible and viable alternative to the systems already in place.

The launch of BRICS Pay constitutes an important milestone in the BRICS dedollarization strategy. If this blockchain-based cross-border payment system manages to deliver on its promises, it could not only redefine trade between these nations, but also threaten the dollar's dominant position globally. In the longer term, BRICS Pay could become an essential solution for many countries wishing to free themselves from American influence on international trade. However, it remains to be seen whether this initiative will succeed in taking hold and disrupting the current global financial order.