BRICS Payment Push: Local Currencies, Not a Common Currency

As BRICS leaders meet in New Delhi on September 12-13, payment systems and local-currency trade are expected to be important subjects of discussion. BRICS countries are exploring ways to reduce their dependence on the US dollar without creating a common BRICS currency.

On November 30, 2024, then US President-elect Donald Trump threatened BRICS countries with 100% tariffs if they created a common currency. He repeated the threat as President on January 30, 2025, warning that countries challenging the dollar could lose access to the US market.

Many BRICS countries are concerned about the “weaponisation” of global financial infrastructure, particularly the Society for Worldwide Interbank Financial Telecommunication, or SWIFT.  The system was established as a politically neutral, member-owned cooperative under Belgian law. It provides a common messaging system through which banks send instructions for international transactions; it does not transfer money itself.

However, its neutrality has come under pressure from Western sanctions. Sanctioned Iranian and Russian banks have been disconnected from SWIFT, making it difficult for them to send or receive international payments. Since dollar payments generally pass through US-regulated correspondent banks, Washington can also freeze assets, block transactions and impose secondary sanctions. These actions have encouraged Russia, China and other BRICS members to develop alternative payment channels that are less vulnerable to Western control.

Common BRICS currency is premature

A common BRICS currency would require a central monetary authority, common fiscal rules, a shared monetary policy and close coordination of exchange rates. The European Union created the euro only after decades of economic integration, institution-building and binding treaties. Even today, the euro area faces tensions among its members. BRICS countries have much greater differences in their economic structures, inflation rates, financial systems and strategic interests. Large trade imbalances and China’s economic dominance could also give Beijing too much influence over a common currency.

India therefore considers a BRICS currency unrealistic and prefers bilateral trade settlement in national currencies.

Focus on practical solutions

BRICS discussions are expected to focus on settling bilateral trade in national currencies, increasing local-currency lending by the New Development Bank and linking domestic payment systems. These measures could reduce currency-conversion costs and exchange-rate risks while protecting trade from disruptions caused by Western sanctions.

The main proposals include CIPS, mBridge, Project Nexus, India’s rupee-settlement arrangements and Russia’s SPFS.

Renminbi payment network

China’s Cross-Border Interbank Payment System, or CIPS, clears and settles cross-border renminbi transactions. Launched in 2015, it supports yuan-denominated trade and reduces dependence on Western correspondent-banking networks, although it can use SWIFT-compatible messaging. CIPS is used by banks operating in Russia, the UAE, Saudi Arabia, Singapore, Pakistan, South Africa and Brazil. It processed transactions worth about RMB 180 trillion in 2025. Its wider adoption would help China internationalise the renminbi.

mBridge: Cross-border settlement through digital currencies

mBridge is a more ambitious experiment. Developed by participating central banks, initially with the BIS Innovation Hub, it uses a shared digital ledger, or blockchain, to enable direct, near-real-time payments and foreign-exchange transactions in wholesale central-bank digital currencies. Its participants include China, Hong Kong, Thailand, the UAE and Saudi Arabia. By November 2025, mBridge had reportedly processed transactions worth about $55.5 billion, with China’s digital yuan accounting for more than 95% of the settlement value.

Although mBridge could make transactions faster and cheaper, India may hesitate to join a platform that could become dominated by China and the digital yuan.

CIPS and mBridge work differently. CIPS handles traditional, account-based renminbi transfers through clearing banks. mBridge allows direct settlement in wholesale central-bank digital currencies, reducing dependence on correspondent banks and separate financial-messaging networks.

In short, CIPS provides Beijing-controlled infrastructure for conventional renminbi trade, while mBridge offers a new digital platform for settlement in multiple currencies.

Project Nexus: India’s decentralised alternative

Project Nexus offers a different model. Supported by India, Singapore, Malaysia, the Philippines and other Southeast Asian partners, it is designed to connect existing domestic instant-payment systems. Instead of requiring a central blockchain or common digital currency, Nexus uses standard technical links, known as APIs, to connect systems such as India’s UPI and Singapore’s PayNow. It would support real-time, low-cost retail payments, remittances and commercial transfers.

While mBridge seeks to transform wholesale cross-border settlement through a shared digital ledger, Nexus follows a decentralised approach that preserves national control and existing banking systems. Commercial implementation involving India and its Southeast Asian partners is expected around 2027.

India’s other payment initiatives

India also supports bilateral rupee settlement through Special Rupee Vostro Accounts, international UPI links and possible connections among the central-bank digital currencies of BRICS members.

These mechanisms would allow countries to settle selected transactions directly in national currencies without joining a China-led network. India is likely to present them as tools for reducing costs, speeding up payments and strengthening financial resilience—not as an anti-dollar campaign.

Russia may separately promote its System for Transfer of Financial Messages, or SPFS. It was developed as an alternative to SWIFT, but its limited international participation reduces its appeal as a BRICS-wide platform.

Likely outcome of the summit

The Delhi summit is unlikely to endorse a common BRICS currency or adopt a single China-led payment platform. A more likely outcome is broad support for:

• Greater invoicing and settlement of trade in national currencies
• Increased NDB lending in members’ currencies
• Expansion of bilateral payment arrangements
• Links among domestic instant-payment networks
• Further technical work on connecting central-bank digital currencies
• Will the new BRICS tools hurt dollar dominance?

The US dollar’s global dominance is likely to remain secure for some time. No competing currency is supported by financial markets with comparable depth, liquidity, transparency and global reach. But BRICS initiatives may nevertheless make a small dent in dollar use by encouraging bilateral trade in national currencies, expanding local-currency development lending and linking national payment systems. These mechanisms could become important in selected trade routes, especially for sanctioned countries.

Their global impact, however, will remain limited by internal BRICS rivalries, as well as currency volatility, limited convertibility, uneven financial regulation and large trade imbalances.  BRICS may gradually reduce dollar use in some transactions, but it is unlikely to displace the dollar from the centre of the international financial system.