English
Introduction
The BRICS+ alliance is accelerating efforts to build an alternative cross-border payment and settlement system, with 2026 emerging as a pivotal year for de-dollarization. As Saudi Arabia officially joins BRICS in early 2026 and multiple nations actively pilot bilateral trade settlement in local currencies, the push to reduce reliance on the US dollar has moved from rhetoric to operational reality. This article examines the technical, political, and financial viability of a BRICS-backed reserve asset or payment network, analyzing how China, Russia, India, and new members like Saudi Arabia and the UAE are aligning on de-dollarization, and what this means for global financial infrastructure.
Background: The BRICS+ De-Dollarization Drive
The BRICS bloc—now comprising Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia, and the UAE—represents over 40% of the global population and 37.3% of global GDP (PPP). The de-dollarization movement has gained momentum since the US weaponized the dollar-centric financial system by freezing $300 billion in Russian reserves in 2022. The US dollar's share of global foreign exchange reserves has fallen from 72% in 2001 to 56.32% in Q2 2025, its lowest level in 30 years. Meanwhile, the yuan's share of global payments hit a new high of 4.74% in April 2026, and BRICS+ local currency trade now accounts for approximately 67% of intra-bloc transactions.
Key Components of the BRICS+ Payment System
BRICS Pay: A SWIFT Alternative
BRICS Pay is a decentralized, blockchain-based payment messaging system designed to bypass SWIFT and the US dollar. Developed by the BRICS Business Council, it features a Decentralized Cross-border Messaging System (DCMS) that operates without a central hub, making it resistant to external control or sanctions. The system aims to integrate existing national payment infrastructures—Brazil's Pix, Russia's SPFS, China's CIPS, and India's UPI—into a unified network. Under India's 2026 presidency, full operational implementation is targeted by the 2026 BRICS summit. BRICS Pay will enable direct local-currency transactions, reducing conversion costs and settlement times.
mBridge: CBDC-Based Cross-Border Settlements
Project mBridge, a multi-central bank digital currency (CBDC) platform, reached its minimum viable product stage in mid-2024. Led by the Bank for International Settlements (BIS) Innovation Hub, the People's Bank of China, the Hong Kong Monetary Authority, the Bank of Thailand, and the Central Bank of the UAE, mBridge enables instant, peer-to-peer cross-border payments using CBDCs. Built on a distributed ledger technology platform compatible with the Ethereum Virtual Machine, it has been tested with real-value transactions. Saudi Arabia joined the project as a full participant, signaling its commitment to CBDC-based settlement systems.
China's CIPS: The Yuan Settlement Backbone
China's Cross-Border Interbank Payment System (CIPS) processed over 758,000 transactions worth 16.26 trillion yuan (approximately $2.3 trillion) in April 2026 alone, with a peak of 19.33 trillion yuan in March 2026. CIPS now has over 1,500 financial institutions in 117 countries, making it the most established alternative to SWIFT for yuan-denominated trade. While CIPS still relies on SWIFT messaging for some transactions, China is gradually decoupling by promoting direct participant connections.
Strategic Implications for the US Dollar
The petrodollar system—the cornerstone of dollar hegemony since a 1974 US-Saudi agreement—is showing cracks. In June 2024, the 50-year pact expired without a formal renewal. Saudi Arabia now accepts yuan for oil sales to China, with yuan-priced oil exports rising from 15% to 22% in early 2026. China has become Saudi Arabia's largest oil customer and signed a $7 billion currency swap agreement in 2023. The petrodollar system's decline could accelerate if more oil producers follow suit.
However, the dollar still dominates 88% of global forex transactions and remains the primary reserve currency. No single replacement has emerged. The BRICS+ bloc lacks consensus on a unified currency—India has distanced itself from the idea, emphasizing the dollar's role in global stability. Instead, the focus is on payment interoperability and local-currency settlement networks.
Risks and Challenges
Fragmentation of global financial infrastructure poses significant risks. Multiple competing payment systems could increase transaction costs, reduce transparency, and create regulatory arbitrage. The IMF has warned that a fragmented system could undermine financial stability. Additionally, BRICS members have divergent geopolitical interests—China and Russia push aggressively for de-dollarization, while India and Brazil maintain strong trade ties with the West. Technical hurdles include integrating disparate national payment systems, ensuring cybersecurity, and achieving sufficient liquidity in local currency markets.
Expert Perspectives
The multipolar order we aim for is reflected in the international financial system, Brazilian President Lula da Silva has stated, advocating for a BRICS currency. However, analysts at the Atlantic Council note that the dollar's dominance is not just about US power—it's about network effects, deep capital markets, and trust that no other currency currently matches. A 2026 report from the BIS highlights that while mBridge proves technical feasibility, scaling it to global levels requires governance frameworks that accommodate diverse legal systems and monetary policies.
FAQ
What is BRICS Pay?
BRICS Pay is a decentralized digital payment system that allows member countries to transact directly in local currencies, bypassing SWIFT and the US dollar. It is expected to launch in 2026 under India's presidency.
Will there be a single BRICS currency?
No. BRICS has abandoned plans for a unified currency like the euro. Instead, the bloc is building a network of interoperable national payment systems and exploring a gold-backed settlement unit called the 'Unit' for limited use.
How does mBridge work?
mBridge is a multi-CBDC platform that enables instant cross-border payments using central bank digital currencies. It uses a shared ledger and smart contracts to automate settlement, reducing costs and time from days to seconds.
Can BRICS+ really challenge the dollar?
In the near term, the dollar's dominance remains intact due to deep capital markets and network effects. However, BRICS+ initiatives are eroding the dollar's monopoly in trade settlement, especially for energy and commodities. A tipping point could come if major oil producers shift pricing away from the dollar.
What does this mean for investors?
Investors should monitor the rise of yuan-denominated assets, gold accumulation by central banks, and the growth of alternative payment networks. Diversification away from dollar-centric portfolios may be prudent as the global monetary system becomes more multipolar.
Conclusion and Future Outlook
The BRICS+ payment system represents the most consequential shift in global monetary architecture in decades. While a full replacement of the dollar is unlikely by 2026, the operational launch of BRICS Pay, the expansion of mBridge, and the continued growth of CIPS will create a parallel financial ecosystem. The future of global reserve currencies will likely be multipolar, with the dollar, euro, yuan, and potentially a BRICS-backed digital asset coexisting. For policymakers and investors, the key takeaway is that de-dollarization is no longer a theoretical debate—it is an operational reality that demands strategic attention.
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