For years, headlines around BRICS have been dominated by one dramatic question: Is the bloc trying to replace the US dollar?
The short answer is no.
The more accurate answer is also more interesting.
As India prepares to host the upcoming BRICS summit, the real focus is not on launching a flashy new “BRICS currency,” but on something far more practical and quietly disruptive: a shared payment system that links national digital currencies.
This is not about symbolism. It’s about plumbing.
Infrastructure beats ideology
Rather than confronting the dollar head-on, BRICS countries are choosing a pragmatic route—building alternative payment rails that allow them to trade directly in their own currencies. The idea is simple: if India can pay China in digital rupees and China can receive digital yuan directly, why route the transaction through the US dollar and the SWIFT network?
This approach avoids political grandstanding while addressing real pain points in global finance: slow settlements, high transaction costs, exposure to sanctions, and dependence on Western-controlled infrastructure.
History shows that systems tend to change not through dramatic announcements, but through quiet infrastructure shifts. Railways reshape economies more effectively than speeches—and BRICS seems to have learned that lesson.
Clearing up the biggest misunderstanding
Despite persistent rumors, BRICS is not creating a single shared currency. There is no plan for a monetary union, no surrender of national control, and no BRICS “central bank.”
Earlier proposals along those lines failed for obvious reasons: vastly different inflation rates, capital controls, economic structures, and fears that any shared currency would be dominated by China’s yuan.
The current plan takes a different path. Instead of inventing a new currency, BRICS aims to connect existing central bank digital currencies (CBDCs)—such as India’s digital rupee, China’s e-CNY, and Russia’s digital ruble—through interoperable systems. Each currency remains fully sovereign. What changes is how smoothly they interact.
Why India matters so much
India’s role is central, and not just because it is hosting the summit.
New Delhi brings real-world experience to the table. Its Unified Payments Interface (UPI) transformed domestic payments by focusing on interoperability rather than ownership. That same philosophy is now shaping its BRICS agenda: build systems that work across borders without giving up sovereignty.
India has also learned from failure. Earlier bilateral trade arrangements with Russia left Moscow holding large volumes of rupees it couldn’t easily spend—the so-called “rupee trap.” That episode exposed the limits of one-to-one currency settlements and highlighted the need for a broader, multilateral network where currencies can circulate rather than pile up uselessly.
How the system would actually work
At the core of the proposed BRICS payment framework are two practical mechanisms: settlement cycles and foreign exchange swap lines.
Settlement cycles allow transactions to be netted over time instead of settled one by one. If India imports more from China than it exports, only the net difference is settled at the end of the cycle. This drastically reduces the amount of currency that needs to move and prevents imbalances from spiraling out of control.
Swap lines act as insurance. If a country temporarily needs more of another member’s currency—say, during a surge in energy imports—its central bank can access that liquidity through pre-arranged swaps. This keeps trade flowing even during shocks.
Together, these tools make local-currency trade viable at scale.
The dollar isn’t disappearing—but cracks are showing
None of this means the dollar is about to collapse. It still dominates global reserves, trade invoicing, and international payments. But the system is under strain.
The sheer scale of US and global dollar-denominated debt has turned confidence in the dollar into a systemic risk. As debt servicing costs rise and geopolitical tensions grow, more countries are looking for buffers rather than replacements.
Gold buying by central banks tells that story clearly. In 2025, central banks’ gold holdings surpassed their US Treasury holdings in value for the first time in decades. This shift doesn’t signal rebellion—it signals hedging.
BRICS payment rails fit into this pattern: not revolution, but risk management.
Sanctions changed the calculus
The freezing of Russian reserves was a turning point. It sent a blunt message to the world: access to the global financial system can be revoked.
Russia was not the first to face this reality, but it was the largest and most systemically important case. The lesson was clear—if it can happen to Russia, it can happen to anyone.
That realization has accelerated interest in parallel systems that can act as shock absorbers during crises, ensuring that trade in essentials like energy and food doesn’t grind to a halt.
From bilateral links to a shared network
The BRICS payment system is unlikely to appear overnight as a single, unified platform. It will evolve step by step, building on existing connections.
One early model is the India–UAE payment corridor, where UPI already interoperates with local systems. Brazil’s PIX and China’s digital payment infrastructure could follow similar paths.
The challenge will be coordination without centralization—creating shared standards without forcing full harmonization. If BRICS gets that balance right, it won’t replace SWIFT, but it won’t need to.
Quiet change, lasting impact
The age of a single, uncontested financial system is not ending tomorrow. But it is no longer unquestioned.
By focusing on infrastructure rather than ideology, BRICS is laying the groundwork for a world where financial flows have alternatives. Not to overthrow the dollar—but to ensure that global trade does not depend on a single set of rails.
And in geopolitics, the systems that endure are rarely the loudest ones. They’re the ones that work.
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