BRICS Countries Are Building a Settlement System "Invisible" to the United States
The United States has tried to control all global financial flows, but it has had the opposite effect. BRICS countries are accelerating the construction of an independent payment system outside the US dollar. How will this system work, what advantages will it bring to Russia, and why is the idea of a BRICS common currency no longer being mentioned?
This week, during India's tenure as the rotating chair of BRICS, the first coordination meeting of ministers / deputy ministers (representatives of each country) was held. Sergey Ryabkov, Deputy Foreign Minister of Russia and head of the Russian delegation, emphasized that there is an urgent need for a market-driven infrastructure for cross-border payments, settlement, custody, and reinsurance within BRICS.
As early as January this year, the Reserve Bank of India (RBI) proposed including the interconnection of central bank digital currencies (CBDCs) among the five BRICS countries (Brazil, Russia, India, China, and South Africa) on the agenda of the 2026 BRICS summit (India is the host country this year). The goal is very practical: to reduce the cost of cross-border payments, increase speed, and reduce reliance on expensive multi-tiered intermediary banks. The term "interconnection of CBDCs" was officially proposed.
This proposal was immediately interpreted as another attempt to create a BRICS common currency. However, the statement itself did not contain such content. When Reuters reported on the move by the RBI, it clearly stated that India was deliberately emphasizing that it was not pushing for de-dollarization.
History is repeating itself. In 2023, there were discussions about trade settlement currencies (not necessarily a unified "cash," but rather a settlement currency). At the time, Brazilian President Lula publicly supported the idea of a BRICS trade currency. Yet, just one year later, he stated that the discussion should not be about a BRICS common currency, but rather a unified settlement system.
The closer it gets to implementation, the more official statements emphasize terms like "interoperability," "payment platform," and "local currency," rather than "unified currency." As early as 2025, Reuters reported that Brazil, during its tenure as chair, did not push for a BRICS common currency, despite seeking to improve the settlement infrastructure to reduce dependence on the US dollar.
This is easy to understand: discussions within BRICS about settlement systems and a "unified currency" have angered Washington. Trump has repeatedly threatened to impose heavy tariffs on any actions that weaken the "excellent dollar." BRICS countries have already absorbed and understood these signals: any action that could be interpreted as weakening the dollar would invite trade sanctions from Washington.
India's latest proposal is no exception. Despite no official statement about a "unified digital currency," media outlets still speculated that "interconnecting CBDCs" was a step toward a common currency. This kind of report spread because the word "linking" used in the English version of the RBI's statement can easily be interpreted as a move toward "unification."
Setting aside political rhetoric, the concept of a BRICS common currency faces several fundamental obstacles.
First, to have a unified exchange rate and unified fund price, countries must coordinate interest rates, inflation targets, and regulatory rules, or establish a supranational center to make decisions for all countries. For BRICS, this means that some countries must sacrifice their autonomy for collective decision-making — which is almost impossible politically and economically.
Second, there is the issue of the issuing center: who will be the "BRICS Central Bank"? Any common currency requires an institution similar to the European Central Bank in the Eurozone: a unified issuer, unified liquidity, and crisis management institutions. The US has the Federal Reserve as a unified monetary policy center (despite the broader US dollar infrastructure also including the Treasury Department). BRICS does not have such a "common Federal Reserve," and establishing one would require determining who will lead, leading to conflicts of interest.
Third, the economic and trade structures of BRICS countries differ greatly. Some need weak currencies to promote exports, while others need strong currencies to import technology; some have long-term surpluses, while others have long-term deficits. Under such differences, a common currency would only lead to endless arguments over "who benefits more."
Therefore, the official stance of most BRICS capitals on the currency issue is quite restrained. For example, the Kremlin has repeatedly stated that BRICS does not plan to launch its own common currency. South African Finance Minister had emphasized as early as 2023: the issue is not replacing SWIFT, nor a "common currency," but mechanisms to facilitate local currency trade.
At the same time, it is understandable that Russia and other Global South countries want to build a financial architecture that is not controlled by the US and not monitored by the US.
Even if a transaction is priced in rupees or real, it often goes through a chain that includes global banks, compliance reviews, and judicial access points. This means that all these transactions are visible to the US.
After the 9/11 incident, the US launched the Terrorist Financing Tracking Program (TFTP), which can access financial message data. Any bank with an agent account in the US or relying on the dollar clearing system would face a sharp increase in compliance risks and obligations. In practice, agent accounts may become an "entry point" for accessing information and conducting investigations. Thus, the key conclusion is: as long as the infrastructure and participating banks remain embedded in the global messaging and agent relationship system, local currency settlements cannot guarantee "invisibility."
This is why the RBI's latest proposal is to connect existing or developing central bank digital currencies across countries, making cross-border payments faster, cheaper, and invisible to Washington. This "invisibility" holds significant importance for Russia. Russian Foreign Minister Lavrov recently stated that the initiative for the BRICS payment system stems from the necessity of escaping the US' firm control in areas such as payments, investments, and trade.
But why was this proposal made by India? For New Delhi, cross-border settlements are not an abstract issue. During 2025–2026, the US trade agenda will tighten, and Russian oil has become a lever for Washington to exert pressure. In this environment, India wants an additional settlement channel that is less susceptible to external control — a perfectly logical strategy. And "interconnecting CBDCs" is one of the few technical projects that can be advanced without labeling it as "anti-dollar" — avoiding angering the US, yet achieving actual independence from the Federal Reserve, the dollar, and Washington.
If the BRICS "CBDC Interconnection" project is truly implemented, the potential benefits are obvious:
- Faster and cheaper settlement
- Higher reliability in the context of sanctions
- Naturally, it would also partially reduce the use of the US dollar
However, even if this system comes into existence, it does not mean that all BRICS foreign trade will "shift" to central bank digital currencies.
First, trading with Western countries and some Global South countries still uses the US dollar or euro more conveniently — due to greater liquidity, risk hedging, and a more mature legal system.
Second, a principle issue: India and South Africa have long-term trade and balance of payments imbalances, and in different stages, they rely on capital and investment inflows to compensate, and a large portion of this capital has historically been tied to the US financial circle.
This has led to a "two-footed" strategy: India wants to continue acting as a "comfortable partner" for the West, avoiding excessive reliance on China, while building cooperation channels within BRICS. To achieve this, a new mutual settlement architecture that is invisible to the US Treasury is needed.
Original: toutiao.com/article/7607384573130834447/
Statement: This article represents the views of the author alone.