The Evolving BRICS+ Payments System_ A Primer_ Charting the path to de - dollarize cross - border payments

Summary of the BRICS+ Payments System Conference Call Industry Overview - The document discusses the evolving payments system among BRICS+ countries, focusing on the de-dollarization efforts and the development of independent payment infrastructures separate from US and Western systems [2][4][11]. Key Points and Arguments 1. De-dollarization Debate: The debate on the US dollar's reserve currency status is intensifying due to geopolitical fragmentation and the use of financial sanctions by the US and its allies [2][4]. 2. BRICS+ Payment Sovereignty: BRICS+ countries are pursuing 'payments sovereignty' by developing independent payment infrastructures, which are at various stages of discussion and implementation [4][11]. 3. Challenges to Alternative Systems: Geopolitical factors and divergent national objectives among emerging market countries pose significant challenges to establishing an alternative payments system, rather than technical barriers [4][8]. 4. Multi-CBDC Platform: The potential for a multi-Central Bank Digital Currency (CBDC) platform is highlighted, with several BRICS+ countries advancing their domestic digital payment infrastructures [4][9]. 5. Role of Multilateral Institutions: Institutions like the AIIB and NDB are seen as foundational for an alternative international financial system, although they currently lack sufficient liquidity support mechanisms [4][11]. 6. SWIFT and CHIPS: The document emphasizes the importance of SWIFT and CHIPS in the current global payments architecture, with the dollar accounting for nearly half of all SWIFT transactions [27][31]. 7. BRICS+ Leaders Summit: The upcoming BRICS+ leaders summit in Rio de Janeiro is expected to focus on trade, investment, and finance, but no major announcements regarding de-dollarization are anticipated [11][50]. Additional Important Content 1. Historical Context: BRICS countries have long opposed the existing international financial architecture, advocating for greater representation of emerging economies [6][38]. 2. Geopolitical Dimensions: The geopolitical landscape, particularly following Russia's invasion of Ukraine, has intensified discussions around reducing reliance on the dollar [40][41]. 3. Future Initiatives: Various proposals for de-dollarization are being discussed, including a BRICS common currency and cross-border payment initiatives, though many remain in the proposal stage [51][54]. 4. Political Will: The main hurdle to establishing an alternative payments architecture is political will, as diverging objectives within BRICS+ countries complicate consensus [9][40]. 5. US Response: The US has expressed concern over BRICS+ de-dollarization efforts, with former Treasury Secretary Janet Yellen emphasizing the importance of protecting the dollar [47][48]. This summary encapsulates the critical insights from the conference call regarding the BRICS+ payments system and the ongoing efforts towards de-dollarization, highlighting both the challenges and potential pathways forward.