| Key Points: – BRICS Pay aims to provide an alternative to SWIFT, facilitating international payments in local currencies and reducing dependence on the U.S. dollar. – The president-elect threatened 100% tariffs on countries supporting alternatives to the dollar, raising concerns of a multilateral trade war. – If successful, BRICS Pay could accelerate the trend of “de-dollarization,” altering the dynamics of global trade and finance. |
BRICS Pay, introduced in October 2024, leverages blockchain technology and QR codes to facilitate international payments using local currencies. The system was launched by the BRICS coalition, originally composed of Brazil, Russia, India, China, and South Africa, and recently expanded to include Iran, Egypt, and other nations.
The goal of BRICS Pay is ambitious: to create a decentralized global financial ecosystem that bypasses traditional dollar-dominated networks like the SWIFT system. By providing an alternative financial pathway, the platform enables businesses and individuals to conduct cross-border transactions without the need for dollars.
The timing of BRICS Pay’s launch is significant. In recent years, SWIFT has become a tool for imposing Western economic sanctions, particularly on Russia after its 2022 invasion of Ukraine. By developing an alternative, BRICS nations aim to insulate themselves from such financial pressures while promoting economic sovereignty.
Trump’s reaction to BRICS Pay was swift and aggressive. Over the weekend, he threatened 100% tariffs on countries adopting alternatives to the dollar, framing the issue as an attack on U.S. economic leadership. In his post, Trump declared that any nation pursuing such measures “should wave goodbye to America,” signaling his intent to defend the dollar’s global status at all costs.
This approach is consistent with Trump’s past tariff threats, which have often forced trade partners into negotiations. However, targeting a coalition as broad and influential as BRICS could escalate into a complex trade conflict spanning multiple continents.
Kremlin officials were quick to dismiss Trump’s warning, emphasizing that many nations are already shifting toward trade in national currencies. Dmitri Galinov, CEO of 24 Exchange, noted that the introduction of BRICS Pay could accelerate the trend of “de-dollarization,” a phenomenon that poses long-term risks to U.S. economic dominance.
While still in its early stages, BRICS Pay has the potential to disrupt global financial systems. By offering a viable alternative to SWIFT, it could weaken the dollar’s role as the world’s reserve currency. For countries under Western sanctions, such a system provides an attractive way to conduct international trade without facing economic restrictions.
That said, experts remain skeptical about the immediate impact of BRICS Pay. Analysts from institutions like Capital Economics and the Atlantic Council argue that the dollar’s position as the dominant reserve currency remains secure for now. Additionally, the idea of a unified BRICS currency, akin to the euro, appears to be on hold, with member nations instead focusing on enhancing the use of national currencies in trade.
Trump’s tariff threat highlights the challenges the U.S. faces in maintaining its economic influence amid shifting global dynamics. Whether this aggressive approach will deter BRICS nations or push them further toward financial independence remains uncertain.
As BRICS Pay continues to develop, its potential to reshape global finance and U.S. trade relations will be closely watched. This emerging system represents both an opportunity for member nations and a significant challenge to the existing financial order.