Since its inception, the BRICS group (Brazil, Russia, India, China, and South Africa) has emerged as a significant platform for developing countries seeking to diversify their economic relations and strengthen their financial systems against Western influence. Over the years, member countries have advanced in building their own financial architecture, with a clear vision of decentralization and self-sufficiency, as reflected in the evolution of the BRICS Pay system. This article explores the foundations, progress, and strategic connections of the BRICS financial system, as well as its impact on international trade relations and its response to Western sanctions.
The BRICS Platform and Its Focus on Financial Architecture
Since 2018, the group has prioritized creating its own trade and payment platform that embodies its principles of friendship, cooperation, and economic sovereignty. During the 2018 Saint Petersburg Economic Forum, the development of the BRICS Pay system was proposed and initiated as a key element in developing an independent financial infrastructure. According to statements from member countries, BRICS Pay is not merely a payment system but a comprehensive tool enabling nations to connect their existing payment systems, creating a more robust, flexible, and resilient network against sanctions and unilateral restrictions.
The concept of BRICS Pay was formalized in 2019, following its presentation in Durban, where its decentralized nature was emphasized. Decentralization is a fundamental strategy to avoid vulnerability to economic sanctions. By not relying on a centralized system controlled by a single nation or entity, BRICS countries aim to minimize the risk of external blocks sanctioning or blocking their financial transactions. This approach reinforces operational autonomy and security within the BRICS community, allowing each nation to maintain its own payment infrastructure while being connected through a common system.
Decentralization as a Resilience Strategy
BRICS Pay does not seek to replace existing platforms but to complement and unify them into a network that facilitates trade and international investment. The decentralization strategy also entails that each country contributes its part to this common application, strengthening interconnectivity and promoting a financial ecosystem capable of withstanding external tensions. Decentralization is seen as the key to protecting against sanctions that other international blocks, especially the West, have used as political tools to limit the economic autonomy of certain countries.
This strategy also reflects the philosophy of a multipolar economy, where BRICS nations aim to reduce their dependence on Western-controlled financial institutions and payment systems, traditionally dominated by entities like SWIFT or the U.S. dollar system. In this context, BRICS Pay positions itself as a step toward a payment platform capable of resisting political and economic pressures from Washington and its allies, particularly amid increasing Western sanctions and tariffs affecting countries like Russia and Iran.
Connections with International Trade Routes and Geopolitics
Another critical aspect of BRICS strategy is its linkage with international trade routes, especially those crossing Eurasia and Central Asia. Integration with routes such as the Trans-Caspian, Transcaucasian, the North-South Corridor connecting Russia with the Persian Gulf, and the Chabahar port in Iran, as well as routes linking China with Eurasia, is fundamental to their vision of boosting regional trade and establishing logistics and financial infrastructure that supports growth.
These trade and transport corridors offer alternatives to traditional Western-controlled routes, allowing BRICS countries to strengthen their commercial and investment relations while reducing dependence on Western pathways. The creation of a decentralized and autonomous financial system complements this strategy by enabling payments and transactions along these routes without relying on Western platforms that could be disabled by sanctions or political conflicts. Cooperation in these areas reinforces a strategic alliance where economic and energy security are foundational pillars.
Confidence and Market Diversification among Member States
Internally, financial sectors in BRICS countries still face challenges such as liquidity issues and relatively young or developing banking markets. However, some countries have a significant number of investors participating in specific financial instruments, like the International Participation Titles (TPI).
BRICS’ financial system, particularly through the BRICS Pay platform and its decentralized infrastructure approach, aims to solidify a secure, resilient, and autonomous payment network. Since its inception in 2018, this project has evolved as a strategy to merge national payment infrastructures, allowing interoperability that facilitates trade and investment among member countries without relying on Western-controlled platforms like SWIFT.
Rather than replacing national systems, the goal is to integrate them into a common network through a decentralized architecture where each country maintains its own payment infrastructure but connects to a platform that ensures compatibility and security. Decentralization is crucial to prevent external sanctions from disabling transactions, as the network works with diverse local systems that collectively enhance the financial system’s resistance to political and economic pressures.
The connection of this network with international trade routes is strategic. The integration of paths such as the Transcaspian, Transcaucasia, the North-South Route connecting Russia with the Persian Gulf and the Chabahar port in Iran, as well as routes linking China with Eurasia through the Eurasian Economic Union’s Customs Union, aims to boost regional trade and reduce dependence on traditional routes controlled by the West. The creation of a decentralized financial system allows for payments and settlements along these routes without external interference, strengthening a more autonomous and secure logistics and economy.
Internally, some BRICS countries face liquidity challenges and banking markets that are still developing. However, there is growing interest in specific financial instruments, such as the International Participation Titles (TPI), which currently have around 5,000 investors. In this context, the goal is not mass adoption but the formation of a solid base of strategic investors. The medium-term aim is to connect these investors, open markets, and strengthen trade alliances among the member countries, building a more diversified and reliable financial ecosystem. This, coupled with the perception that BRICS countries no longer trust the West due to the political and economic sanctions they have suffered, reinforces their interest in developing a multipolar and autonomous economy.
The BRICS DCMS system is a decentralized messaging platform developed in Russia, designed to be resistant to manipulation, with encryption and no mandatory fees. It aims to facilitate secure transactions and reduce imbalances in international payments, promoting trade and financial inclusion among member states. Russia supports this initiative to avoid sanctions and control its transactions, while Brazil, under Lula, also shows interest in developing its own payment systems. This decentralized system moves away from the idea of a single bloc currency and embraces the concept of payments in BRICS systems and currencies, gradually displacing the dollar.
Additionally, BRICS countries are promoting various proprietary or alternative payment platforms: Russia with the MIR system and the BRICS DCMS; China with Alipay, WeChat Pay, and CIPS; India with UPI and digital rupee; and South Africa, which is exploring digital payment options. Together, they seek to strengthen their internal payment methods and reduce dependence on the Western financial system and the dollar, promoting transactions in local currencies or regional platforms. In conclusion, the BRICS financial system, through its decentralized platform, connects strategic trade routes and fosters the development of independent economic ties, increasing resilience against Western restrictive policies and creating a more conducive environment for regional and international trade and investment.
