For decades, the global financial system has revolved around a single axis, which is the US dollar. From international trade settlements to cross-border payments, dollar-supported institutions such as the SWIFT messaging network, the International Monetary Fund (IMF), and the World Bank have remained the backbone of global finance.
But as geopolitical tensions intensify and emerging economies grow more assertive, that dominance is increasingly being questioned.
At the center of this challenge stands the BRICS bloc—Brazil, Russia, India, China, and South Africa—now expanded to include countries such as Ethiopia. Rather than confronting the dollar head-on with a new common currency, BRICS nations are pursuing a more calculated and potentially more disruptive strategy: building shared digital payment infrastructure that allows them to trade and settle payments in their own currencies, largely outside the US dollar-based system.
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This proposal is expected to dominate discussions when India hosts the BRICS summit later this year. Reports suggest the Reserve Bank of India has formally recommended that the initiative be placed on the agenda, and, if adopted, it would mark the bloc’s first coordinated attempt to link national central bank digital currencies (CBDCs) into a single interoperable framework.
From Grand Currency Dreams to Practical Infrastructure
The idea of a unified BRICS currency has surfaced repeatedly over the past decade, often capturing headlines but rarely advancing beyond rhetoric. The obstacles were always formidable: vastly different economic structures, divergent inflation and interest-rate regimes, incompatible capital controls, and deep political sensitivities—particularly fears that China’s yuan would dominate any shared currency arrangement.
Learning from these failures, BRICS policymakers are now opting for pragmatism over symbolism. Instead of replacing national currencies, the new proposal focuses on connecting them.
Under the emerging concept, national CBDCs, such as China’s digital yuan, Indian’s digital rupee, and Russia’s digital ruble, would remain fully sovereign and under the control of their respective central banks. What changes is the infrastructure beneath them: a digital “bridge” that allows these currencies to interact directly, efficiently, and securely.
By prioritizing payments infrastructure rather than a single currency, BRICS is betting that systems matter more than slogans. In global finance, whoever controls the rails often shapes the rules.
Why Payments Matter
To understand the significance of this shift, one must look at how international payments work today. Cross-border transactions are notoriously slow, expensive, and opaque, especially for developing economies.
“For many developing countries, the biggest challenge is the chronic shortage of US dollars,” said Haimanot Eshetu (PhD), a senior researcher at the Institute of Foreign Affairs. “A BRICS digital payment system could be a real breakthrough, enabling countries to transact directly using their national currencies.”
Currently, even trade between two non-US countries often requires dollar conversion. A payment from Russia to India, for instance, may involve converting rubles into dollars, routing the funds through SWIFT and correspondent banks, and then converting dollars into rupees, explains Irina Kostetskaya, manager at the BRICS Expert Council-Russia and coordinator of the Civil BRICS Council.
Each step adds fees, delays, and exposure to sanctions or political interference.
“The longer the transaction chain, the higher the cost and the greater the security risks,” noted Haimanot.
A digital BRICS platform built on CBDCs could eliminate many of these inefficiencies. Payments could be settled almost instantly, without correspondent banks, mandatory dollar conversion, or reliance on SWIFT.
Sanctions, Sovereignty, and Strategic Motivation
Beyond efficiency, geopolitics plays a decisive role. Since Russia’s exclusion from SWIFT in 2022, many emerging economies have grown acutely aware of the vulnerabilities embedded in the current financial architecture.
“This initiative is fundamentally about economic sovereignty,” said Teshome Abebe (Prof.), a renowned economist at Eastern Illinois University. “Reliance on the US dollar exposes countries to sanctions, correspondent banking transactions, and geopolitical leverage.”
Proponents argue that by enabling local currency settlements, a BRICS digital payment system could reduce these vulnerabilities and foster a more multipolar financial order. For BRICS members, this is less about overthrowing the dollar overnight and more about creating credible alternatives.
That shift is already visible. China operates its own cross-border messaging system. the China International Payment System (CIPS), which facilitates Renminbi transactions outside SWIFT.
“Through CIPS, sanctions can already be bypassed,” said Alicia Garcia, chief economist for Asia-Pacific at Natixis, an investment banking research firm. “But countries like India or Russia don’t want to rely solely on the Renminbi. They want a system where each can use its own currency without being subject to sanctions.”
This desire for neutrality is one reason why interoperability, rather than a yuan-centered system, has become the preferred BRICS approach.
Ethiopia’s Calculated Bet in a Multipolar World
For Ethiopia, which joined BRICS in 2024, the stakes are particularly high. The country faces persistent foreign-exchange shortages, rising import costs, and limited access to affordable development finance.
“A BRICS digital payment system could significantly reduce Ethiopia’s dependence on the US dollar,” Haimanot said. “That would have immense benefits for trade, investment, and financial stability.”
At the same time, Ethiopia is walking a diplomatic tightrope. President Donald Trump warned that countries aligning with BRICS policies that undermine US interests could face trade penalties, including tariffs.
“Challenges are inevitable,” Haimanot stressed. “Currency is a sensitive issue, and pressure is expected.”
Nevertheless, she emphasizes a balanced, non-partisan approach. Engagement with BRICS does not prevent cooperation with Western institutions such as the World Bank or IMF. Instead, it reflects a broader strategy of diversification.
“The newly proposed system would also gain improved access to financing, including loans from the New Development Bank and swap lines, as well as an opportunity to upgrade its national payment infrastructure by adopting best practices from more advanced BRICS members,” Irina commented.
Teshome foresees that Ethiopia’s trade partners in BRICS, such as China and India, could see smoother Birr-yuan or Birr-rupee flows, aiding exports like commodities and reducing dollar dependency amid forex shortages.
“Ascension to WTO could enhance this,” he told The Reporter Magazine.
The Technology behind the Vision
The technological foundation of the proposed system lies in central bank digital currencies. Unlike crypto currencies, CBDCs are digital forms of national currencies issued and regulated by central banks.
Experts like Irina argue CBDCs could transform international payments.
“Imagine digital rubles being exchanged directly for digital rupees without going through the US dollar,” she said. “This removes intermediaries, reduces costs, and minimizes the risk of payments being blocked.”
Such payments rely on distributed ledger technologies and smart contracts, enabling near-instant settlement and full traceability. Importantly, this does not mean eliminating regulation—on the contrary, CBDCs allow central banks greater oversight.
Practical progress is already visible. The mBridge project, led by the Bank of International Settlements (BIS) and central banks from China, the United Arab Emirates (UAE), Thailand, and Hong Kong, has demonstrated that cross-border payments can be settled in minutes rather than days. The project has processed tens of billions of dollars in transactions, lending credence to the technology’s viability.
BRICS discussions are also building on earlier initiatives such as BRICS Pay, a decentralized messaging and settlement concept aimed at facilitating retail and wholesale payments across member states.
Why a Single BRICS Currency is Unlikely
Despite recurring speculation, experts overwhelmingly agree that a unified BRICS currency is neither practical nor desirable in the near future.
“While the idea of a single unified currency similar to the euro might seem appealing at first glance, it faces considerable practical hurdles,” Irina said. “The economies of BRICS nations vary widely in terms of development levels and structural characteristics: policies effective in China may not work for Ethiopia or South Africa.”
“Establishing a common currency would require harmonizing inflation policies, aligning interest rates, agreeing on uniform money issuance rules, and creating a supranational regulatory body, essentially achieving a level of integration comparable to the European Union,” she further explained.
“Given the current circumstances, a more feasible approach is to ensure interoperability among different digital currencies on a shared platform, enabling them to interact seamlessly.”
Opportunities and Obstacles for Ethiopia
For Ethiopia, the potential benefits are substantial. Faster international payment could reduce trade disputes, while lower transaction costs would make exports more competitive. Access to financing from the New Development Bank (NDB) could also expand, along with currency swap arrangements used by several BRICS members.
“Participation could further accelerate Ethiopia’s digital transformation, and this aligns closely with Ethiopia’s National Digital Payment Strategy (2016-2030),” Teshome noted. “It signals modernization and could attract foreign direct investment from BRICS partners.”
The main strategic motivations for pursuing an “interoperable CBDC infrastructure” instead of a single unified BRICS currency include preserving national monetary sovereignty—each country retains control over its own currency and policy—while avoiding the immense logistical, political, and economic challenges of merging disparate economies for instance fears of dominance by the yuan or unequal influence, says Teshome.
“A unified currency would require deep fiscal harmonization, which BRICS members (with varying inflation rates, reserves, and priorities) have deemed unfeasible or undesirable,” said the economist. “Interoperability allows efficient, direct settlements in national currencies, reducing intermediary costs and exposure to external systems without ceding control.”
However, realizing these advantages will require overcoming notable challenges, chief among them the existing technological gap.
Both Irina and Teshome suggest that Ethiopia will need to invest in modernizing its IT systems, train specialists in emerging financial technologies, strengthen cyber security measures to protect against potential threats, and update its legal framework to accommodate digital finance innovations.
“Although these tasks are substantial, they represent strategic investments in the country’s future. A robust payment infrastructure, much like a modern transportation network, will ultimately enable faster and more efficient movement of goods and capital,” said Irina.
A Gradual Shift
In the future global financial architecture, however, BRICS digital payment systems could play a growing role as parallel, resilient alternatives to SWIFT, accelerating multipolarity and local-currency trade, argues Teshome.
“For countries like Ethiopia (beyond the original five members of the BRICS), it offers inclusion in emerging networks, potential cost savings in South-South trade, and leverage in a diversifying system—though success depends on inclusive implementation, avoiding dominance by larger members, and balancing innovation with stability. Overall, it’s an incremental but meaningful shift toward reduced dollar hegemony,” he said.
Academic research supports Teshome’s cautious optimism.
In his 2023 study ‘Digital Money Options for the BRICS,’ Mikhail Vyacheslavovich argues that creating a common currency is a profound challenge tied to deeper questions of sovereignty, identity, and integration. However, he notes that CBDCs could help bring order to fragmented financial systems and strengthen regulatory oversight.
Recent financial fraud and corruption cases in emerging markets underscore this point. Government-controlled digital currencies, if well designed, could allow authorities to intervene earlier and prevent systemic shocks.
The Bigger Picture
In a broader global context, the BRICS initiative marks a significant step towards a multipolar financial system for experts like Irina.
“It has the potential to reduce reliance on the US dollar and the SWIFT network, streamline cross‑border payments between developing nations, enhance the economic sovereignty of member states, and provide a viable alternative to traditional Western financial institutions,” she stressed.
The US dollar may not disappear, but its unquestioned dominance is no longer guaranteed. And in that space of uncertainty, BRICS’ digital ambitions may help redraw the map of global finance.
