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The dollar dominates international trade, but its monopoly is weakening. Amid geopolitical tensions and Western sanctions, the BRICS are accelerating their strategy to break free from it. The bloc is now working on a local currency payment system capable of profoundly transforming global trade flows. Behind this initiative lies a clear ambition: to reduce Western financial influence and reshape global monetary balances.
In brief
- The BRICS are exploring the implementation of a local currency payment system to reduce their dependence on the dollar.
- The project aims to circumvent Western sanctions and strengthen the bloc’s financial autonomy.
- Transactions in local currencies could reduce costs associated with exchange fees.
- The system could operate with near real-time payments between member countries.
Towards a BRICS payment system independent of the dollar
The BRICS are currently assessing the implementation of an intra-currency payment system aimed at reducing their dependence on the US dollar. This project is taking shape amid geopolitical tensions and economic sanctions.
Geeta Kochhar, a professor at the Centre for Chinese Studies in New Delhi, describes this mechanism as “a strategic tool to provide immunity against Western economic leverage,” adding that it would enable “near real-time” payments, even in the event of dollar volatility.
This system is based on several structural elements that reflect a clear intention to transform international trade:
- A payment system directly linking the local currencies of member countries;
- An alternative to the dollar, considered the most costly in exchange fees;
- A settlement channel whose viability depends on the clearing rate;
- Reduced exposure to Western economic sanctions.
The stated objective is to streamline trade between members while reducing their reliance on financial infrastructures dominated by the West.
A global ambition driven by the alliance’s economic weight
Beyond simple payment infrastructure, the project is part of a broader strategy aimed at strengthening the role of local currencies in international trade. The yuan, the ruble, and the rupee could thus gain importance in intra-BRICS exchanges, supported by the growing volume of transactions between these economies.
Geeta Kochhar emphasizes that this system would function as a “safety net,” helping to secure the supply of essential goods while reducing costs thanks to lower exchange fees. She also notes that these transactions could “circumvent Western financial restrictions,” thereby strengthening the bloc’s economic autonomy.
The potential impact of this initiative takes on a particular dimension when considering the economic weight of the BRICS in key sectors. The alliance accounts for nearly 42% of global oil production and around 40% of grain production.
In this context, the potential use of the intra-currency system for energy payments could trigger major adjustments in international markets. Kochhar highlights the BRICS’ ability to “shape local currency management thanks to their economic clout,” emphasizing that their influence could extend far beyond their borders.
This project paves the way for a rebalancing of the global financial system, where multiple centers of power could coexist. Such a development could reduce the dollar’s grip on international trade while accelerating the emergence of new payment infrastructures. It remains to be seen whether this dynamic will endure and whether it can establish itself against existing mechanisms deeply rooted in the global economy.
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Diplômé de Sciences Po Toulouse et titulaire d’une certification consultant blockchain délivrée par Alyra, j’ai rejoint l’aventure Cointribune en 2019.
Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l’économie, j’ai pris l’engagement de sensibiliser et d’informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu’elle offre. Je m’efforce chaque jour de fournir une analyse objective de l’actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
