BRICS Alternative to SWIFT: A Bold Step Toward Financial Sovereignty

In an increasingly polarized geopolitical landscape, the BRICS bloc — consisting of Brazil, Russia, India, China, and South Africa — has intensified efforts to build financial independence from Western-dominated institutions. Among its most ambitious projects is the creation of an alternative to SWIFT — the global interbank messaging system that facilitates international payments. The move, often dubbed “BRICS Pay” or “BRICS Bridge,” represents a broader shift toward de-dollarization and financial multipolarity.

This article explores the context, significance, challenges, and future implications of BRICS’s attempt to create its own payment infrastructure, independent of SWIFT.

What Is SWIFT and Why Does It Matter?

SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a messaging network used by banks and financial institutions worldwide to securely transmit information and payment instructions. Though not a payment system in itself, SWIFT enables transactions by connecting over 11,000 banks across 200+ countries. Its ubiquity has made it indispensable for global finance.

However, SWIFT is headquartered in Belgium and largely under the influence of Western powers. As seen in recent years — particularly during sanctions against Iran and Russia — SWIFT access can be weaponized, cutting entire countries off from the global financial system. This vulnerability has pushed several nations, especially within BRICS, to seek alternatives.

Why BRICS Wants to Replace SWIFT

The push to establish a SWIFT alternative arises from both practical and political motivations:

  1. Sanction Resilience:
    Russia’s exclusion from SWIFT following the Ukraine conflict in 2022 was a wake-up call for BRICS countries. It underscored how easily the West could paralyze a nation’s economy by restricting access to financial infrastructure.
  2. De-dollarization:
    The dominance of the U.S. dollar in global trade and reserves grants the United States unparalleled leverage. By facilitating transactions in local currencies, BRICS hopes to reduce dependence on the dollar, enhancing monetary sovereignty.
  3. Facilitate Intra-BRICS Trade:
    A BRICS-based payment system would streamline trade among member nations, allowing settlements in local currencies and lowering transaction costs.
  4. Include the Global South:
    Many developing countries share similar concerns about Western financial control. A successful BRICS alternative could attract other nations in Africa, Asia, and Latin America.

BRICS Pay and BRICS Bridge: An Overview

Initially conceptualized in 2018 and gaining traction in 2023–2024, BRICS Pay (also called BRICS Bridge) is a proposed blockchain-based payment system aimed at facilitating cross-border settlements in local currencies. It is not just an interbank messaging system but could also evolve into a digital payment platform, allowing retail and wholesale transfers across borders.

At the 2024 BRICS Summit in Kazan, Russia, the group’s declaration explicitly endorsed the idea of building an “independent payment infrastructure.” The system aims to link the domestic payment networks of member countries, such as:

  • India’s SFMS (Structured Financial Messaging System)
  • Russia’s SPFS (System for Transfer of Financial Messages)
  • China’s CIPS (Cross-Border Interbank Payment System)

By integrating these national platforms under a unified framework, BRICS Pay aspires to rival SWIFT in both scope and efficiency.

Advantages of a BRICS-Based System

  1. Local Currency Settlements:
    By bypassing the dollar, BRICS Pay allows countries to trade directly using their national currencies, reducing foreign exchange risks and dollar liquidity constraints.
  2. Reduced Sanction Exposure:
    Countries using BRICS Pay could continue trading even if disconnected from SWIFT, insulating them from politically motivated financial sanctions.
  3. Lower Transaction Costs:
    Direct payments via a regional system could lower fees and processing times, especially for cross-border trade.
  4. Enhanced South-South Cooperation:
    The system could facilitate trade and investment between developing countries, which are often marginalized in global finance.

Technical and Political Challenges

Despite its promise, BRICS Pay faces substantial hurdles:

  1. Lack of Trust and Integration:
    BRICS is not a monetary union. Its members have divergent economies and policies, leading to asymmetry in interests. For example, India and China — major rivals in Asia — may be reluctant to rely on a shared system dominated by the other.
  2. Technology and Interoperability:
    Integrating different national platforms requires a robust technological framework. Differences in cybersecurity standards, regulatory environments, and banking protocols can complicate system design.
  3. Global Adoption and Liquidity:
    SWIFT has more than 50 years of credibility and scale. It takes time for a new system to gain trust and liquidity, especially in the absence of a global reserve currency within BRICS.
  4. Western Retaliation:
    The U.S. and its allies may retaliate against banks and firms using BRICS Pay, using sanctions or trade restrictions to discourage adoption.
  5. Currency Volatility:
    Unlike the dollar or euro, most BRICS currencies are not globally stable. Relying on them for settlements introduces exchange rate risks unless a new commodity-backed or digital BRICS currency is introduced.

How Does It Compare to Other Systems?

Several countries have already developed or proposed alternatives to SWIFT:

  • Russia’s SPFS: Functional but limited, primarily used within Eurasia.
  • China’s CIPS: Focused on RMB internationalization but still reliant on SWIFT infrastructure for some functions.
  • India’s SFMS: A domestic system with limited global usage.

The idea behind BRICS Pay is to link and scale these efforts, offering a more globally viable alternative.

Global Implications

If successful, the BRICS payment system could:

  • Undermine dollar hegemony by reducing its use in global trade.
  • Empower developing countries with more financial autonomy.
  • Spark the formation of regional monetary blocs, accelerating the fragmentation of the global financial system.
  • Encourage other regional alternatives, like ASEANPay or a Latin American payment union.

However, a full replacement of SWIFT is unlikely in the near term. Instead, we may see a multipolar financial architecture, where BRICS Pay, CIPS, and other systems operate in parallel to SWIFT.

Conclusion

The BRICS initiative to create an alternative to SWIFT is both symbolic and strategic. It represents a pushback against the current global financial order dominated by Western powers and the U.S. dollar. While it faces considerable challenges, its development reflects a world moving toward financial multipolarity.

If successful even on a limited scale, BRICS Pay could reduce economic vulnerability, enhance regional cooperation, and signal a new era where no single currency or country dominates the global financial stage.

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