The global financial landscape, shaped for decades by systems like Bretton Woods and Jamaica agreements, is on the cusp of a significant transformation. As the Bank for International Settlements (BIS) warns of increasing fragmentation and rising global debt, a new initiative, BRICS Pay, is emerging as a potential solution to these challenges. This new payment system is designed to be a decentralized, fair, and accessible alternative to existing centralized services, aiming to foster global cooperation and address critical issues like poverty and hunger.

A Bridge, Not a Barrier

BRICS Pay is not positioned as a rival to existing payment systems like Visa or Mastercard. Instead, it aims to act as a system of “bridges and payment gateways,” connecting international, national, and commercial payment networks. The goal is to provide seamless, secure, and reliable transactions using QR codes, enabling users to make payments in their own national currencies via mobile applications. This approach addresses a major global issue: the high cost and limited reach of traditional payment cards, which are inaccessible to more than half the world’s population.

Collaboration and Decentralization

The BRICS Pay project operates under a unique model. It is being developed by a Consortium of technological, financial, legal, and consulting firms, which functions as a decentralized autonomous organization (DAO). This network-based entity has no central headquarters and operates in accordance with the regulations of each country where its members are based. This decentralized structure ensures flexibility and adherence to local laws.

Key Focus Areas and Goals

BRICS Pay has several key focus areas aimed at improving financial access and efficiency:

• BRICS Pay QR (Retail Payment System): Facilitates consumer-to-business payments using QR codes.
• BRICS PAY B2B (Business Payment System): Streamlines business-to-business transactions.
• BRICS UNIT (BRICS+ Unit of Account): An initiative under discussion to create a common unit of account for the BRICS+ countries.
• BRICS Loyalty (Traveler Rewards System): A future system to provide rewards for travelers.
• BRICS CLEAR (Interstate Digital Settlement System): A planned system for cross-border securities settlement.

The initiative’s origins trace back to the 2018 BRICS Business Council meeting in Durban, where the concept of a New International Payment System (NIPS) was first proposed. After years of technological development and testing, including the exploration of blockchain and cryptocurrency, the project gained approval from all national chapters of the Financial Services Working Group of the BRICS Business Council in 2024.

Real-World Demonstration and Future Outlook

BRICS Pay was put to the test on October 17-18, 2024, at the BRICS Business Forum in Moscow. Over 5,000 participants registered and used the system to make purchases, demonstrating its real-world viability. This successful pilot marked a significant step forward for the project.

By focusing on cooperation, diversification, and accessibility, BRICS Pay aims to empower individuals and nations, ensuring that everyone has equal access to financial services and technologies. It represents a major step towards a more interconnected and equitable global financial system, a vision that aligns with the UN Sustainable Development Goals of No Poverty and Zero Hunger.

However, from a different perspective, some analysts and policymakers view initiatives like BRICS Pay as a potential threat not to the existence of the UN, but to the existing, Western-led international financial system that has been in place since the post-World War II era.

How BRICS Pay and the broader BRICS agenda could be perceived as a challenge to the existing global order:

Challenging the Dominance of the US Dollar and SWIFT

• Financial Leverage: The current international financial system is heavily centered on the US dollar and the SWIFT messaging network. This gives the United States and its allies significant leverage, as they can impose financial sanctions on countries by restricting their access to the global financial system.
• Creating an Alternative: BRICS Pay and other BRICS initiatives, such as the New Development Bank, are seen as direct attempts to create alternative financial infrastructure. This would allow member countries to conduct trade and financial transactions in their local currencies, bypassing the need for the US dollar and the SWIFT network. This is particularly appealing to countries that face or fear being targeted by Western sanctions.
• Multipolar World: The development of an independent financial system is a key part of the BRICS bloc’s vision of a “multipolar” world, where power is not concentrated in the hands of a few nations but is more diffused among different regions. This vision challenges the very foundation of the post-war order, which has been largely dominated by the US and Europe.

Undermining Global Governance Institutions

• Reform vs. Replacement: The UN, World Bank, and International Monetary Fund (IMF) are all products of the post-WWII era. BRICS nations have long called for a reform of these institutions to give developing countries a greater voice and more representation. However, some critics argue that by creating parallel institutions and systems like BRICS Pay, the group is not just seeking to reform the old order, but to create an entirely new one that could eventually diminish the relevance of the existing global governance bodies.
• Geopolitical Competition: While BRICS Pay is a financial tool, it is also a geopolitical one. By providing an alternative to the current financial system, it can be seen as a way for the BRICS countries, particularly Russia and China, to reduce the influence of the West and foster a new bloc of countries aligned against the “rules-based international order” as it currently exists.

The Risk of Fragmentation

• Economic and Financial Fragmentation: The BIS has specifically highlighted the risks of fragmentation in the global monetary system. A splintering of the world into separate financial systems—one centered on the US dollar and another on a BRICS-led system—could lead to increased complexity, reduced efficiency, and greater instability in the global economy.
• Weakening of Global Standards: The UN and other international bodies work to establish global standards for everything from human rights to trade and finance. The creation of parallel systems that operate under different principles could lead to a fragmentation of these standards, making international cooperation and accountability more difficult.

 This is seen by some as a threat to the stability and influence of the international institutions that have governed global affairs for decades.