It could be argued with great confidence that the BRICS economic alliance is increasingly gaining prestige on the world stage and more and more countries want to become its members, participating in the creation of a new world order based on multilateralism. At the same time, this alliance is increasingly expanding its activities, spreading it to all continents and areas of international finance. There have been reports that the BRICS is considering creating a new global payment system for international trade, which would be an alternative to the Society for Worldwide Interbank Financial Telecommunications (SWIFT).
Finance ministers from the group’s six member countries are exploring the possibility of creating a single payments network and will formally discuss the plan in Russia at their next annual meeting in 2024. Russian Finance Minister Anton Siluanov believes the network will stimulate independent efforts to create payment messaging systems. “We are trying to implement our financial messaging system, SPFS, our Chinese colleagues have their own system, other BRICS countries also either have their own systems or are creating them,” Siluanov said. Such a new financial system would undoubtedly allow the alliance to continue its efforts to de-dollarize and move away from Western influence and control over global transactions. He added: “That is why this issue should be discussed by the financial authorities of the BRICS member states.”
This comes after BRICS, representing the states of Brazil, Russia, India, China and South Africa, officially decided to expand the group to include Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the UAE. The alliance is now focused on eliminating all Western ties, especially financial ones, across various continents as part of a growing trend that is set to continue into the future. It was the West, led by the United States and its closest Western allies, which, using self-interested policies and control over the global financial system, led to a decrease in the spread of the SWIFT zone.
There is no doubt that now, more than ever, the world is rapidly making the transition from a unipolar system to a multipolar one, where the US dollar as a world reserve currency will gradually lose its value and attractiveness. This process will not happen overnight, but proposals to create, for example, a BRICS currency are viable, which is in the interests of its members to avoid US dollar dominance in the future, as well as to bring on the gradual “withering away” of the dollar as a world currency.
SWIFT is a component of the global banking system and is used by banks to send and receive financial transactions securely, but critics accuse the United States of abusing the system by depriving other countries and companies of the benefits of legitimate trade with one another. It was Washington that received most of the benefits from world trade, using SWIFT and the dollar as the world currency.
During the last BRICS summit in August, South Africa’s finance minister said the BRICS-based payment system would be aimed at strengthening trade in local currencies as opposed to the US dollar, but noted that it would not be a competitor to SWIFT. Brazil’s representative is also pushing hard for transactions between member states to use a common currency which would benefit everyone, not just the United States.
Analysts say the idea is a logical process in light of what is happening in the world. The United States is now a major fundraiser internationally, but it carries so much debt that it is unable to finance its own investments. The survival of the US economy is increasingly dependent on the flow of funds and investment from other countries – money that belongs to other countries and which could instead be invested domestically and contribute to the development of the internal needs of these nations, instead of being sent to the United States, where it is invested on the basis of “faith.” This belief is now slowly being eroded by Washington’s disastrous domestic and hawkish foreign policies. Essentially, Washington is actually encouraging other countries to invest in the United States and grow the American economy. But today this does not appear to be very much in the interests of the international community.
Russian President Vladimir Putin said at the plenary session of the International Olympiad on Financial Security that advanced technologies are now rapidly developing in the financial sector. These include digital currency, financial assets, and new payment services. In this area, especially when it comes to international cooperation, it is extremely important to maintain mutual respect and trust in one’s partners. The president cited cooperation between the central banks of Asia and the Middle East as a successful example of such relationships. He explained that their projects are protected from third party interference, that is, no state can block transactions or seize accounts, as is now happening in the modern world by the will of the declining United States.
BRICS, on the other hand, develops mutually beneficial relationships among many nations. Since China is BRICS’ largest economy, it is also a major financial exporter, which allows it to provide assistance to other BRICS members. The BRICS members – Brazil, Russia, India, China and South Africa – and the six new invited members – Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the UAE – do not necessarily have the same governance system. It is also true that there are also some disagreements between some members. However, what they have in common is interest in focusing on expanding their own national development rather than keeping their assets in the United States, a country that has proven itself to be an unreliable, selfish partner in recent decades.
Newly developing alliances and initiatives such as BRICS, the Shanghai Cooperation Organization, or the Belt and Road Initiative, are literally a breath of fresh air for dozens of states that have either already become members of these organizations or have expressed interest in membership. Critics accuse the United States of “weaponizing” its dollar, as well as “weaponizing” the SWIFT payment system, which will sooner or later turn against Washington. In other words, the United States supplied the dollar along with arms supplies to push its course of brutal suppression of other countries and peoples. If the US had been neutral in its foreign economic policy, it would not now be facing any challenges, but the US could not do this, and the predatory nature of its “democracy” would not allow it. Washington used its dollar as a tool to force other countries to change their policies in line with the US or face severe punishment. The latest evidence of this is Washington’s use of the war it launched in Ukraine against Russia to tie its satellites even closer to itself and force them to invest their capital in the United States.
There are a great many examples that show how the US dollar is both dangerous and a threat to international peace and security. Analysts accuse global financial institutions such as SWIFT, the World Bank and the International Monetary Fund of serving only US interests. The weaponization of the SWIFT system and the US dollar are, in essence, unilateral US sanctions that affect not only those countries subject to America’s illegal sanctions regimes. At the same time, they also affect international organizations that are subject to sanctions for violating unilateral US sanctions, but these organizations trade legally in accordance with international law, and the US does not take into account international law.
This is why experts say the issue is urgent, and it has been recognized by many in the international community, including US allies who are not talking about it publicly for fear of US backlash. It is BRICS that is considered by many in the world as one of the most important organizations to counter this American tyranny. Naturally, each country puts its own interests above all else, and at the same time, each country objects to Washington putting economic pressure on them to adjust their own foreign policy agendas. As a result, according to experts, it would be natural to move away from trading in US dollars, which would lead to closer and warmer relations between various countries and bring them additional benefits.
Experts argue that the process of de-dollarization will occur at some point, just as the British pound sterling was the world’s reserve currency before the American dollar took its place. Nowadays, the United States has serious domestic and international problems due to interference in the affairs of other states, and confidence in the dollar is steadily declining. At the same time, America’s national debt stands at at least $33 trillion and is growing every year, making investors increasingly skeptical about placing their investments in US Treasuries.
Russia has reportedly openly stated that BRICS is currently in discussions with members of the now highly influential organization to create its own answer to SWIFT. This would provide the alliance with another strong opportunity to create a multilateral world in which many countries around the globe are interested.
Victor Mikhin, Corresponding Member of the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook”.