De-dollarisation question of the BRICS economy: How UPI, CIPS, Pix and SPFS could link up to bypass SWIFT? EXPLAIND

The 18th BRICS summit in New Delhi is scheduled to be held on September 12-13, with India as the Chair. The summit is expected to push for mechanisms to facilitate cross-border payments among members, including links between digital payment systems and central bank digital currencies (CBDCs), with the concept of de-dollarisation of the BRICS economy.

This concept is the ongoing, gradual process by which member nations are planning to reduce their dependence on the US dollar for international trade, investment, and foreign exchange reserves. The idea enables all trading goods and energy to be paid for directly using national currencies (such as the Indian rupee, Russian ruble, or Chinese yuan) instead of converting through the dollar.

Other key methods of this concept include developing independent messaging and payment systems, like proposed blockchain platforms or the BRICS Bridge, to bypass Western-dominated networks like SWIFT. In addition, the method has come up with the concept of lending through institutions like the BRICS New Development Bank to expand local currency use.

Why does BRICS focus on this shift?

BRICS nations have been planning the concept to shield member economies from the influence of Western financial restrictions and asset freezes, especially highlighted after sanctions on Russia. The main focus was to gain economic sovereignty by lowering vulnerability to US monetary policy shifts, inflation, and exchange rate volatility.

Other aims also include cutting transaction fees linked to constant conversion into US dollars for cross-border commerce. The 2025 BRICS leaders’ and ministerial statements situate these efforts within a broader project of strengthening Global South cooperation and reforming global governance structures.

New Development Bank's role

The New Development Bank stands as BRICS' clearest institutional vehicle for de-dollarisation. Its legal framework permits local-currency financing, with the 2022–2026 General Strategy targeting 30 per cent of commitments in members' national currencies, market conditions permitting. The Bank's annual report underscored that such lending reduces exchange-rate and interest-rate exposure.

This matters for three reasons: it aligns financing with domestic revenue, minimising currency mismatch; it strengthens local capital markets by encouraging domestic-currency funding; and it offers BRICS a credible institutional pathway toward gradual diversification. Official BRICS statements consistently back this approach; April 2025's Foreign Ministers' statement stressed "continuously expanding local currency financing and strengthening innovation in investment and financing tools.

How UPI, CIPS, Pix and SPFS Could Link Up to Bypass SWIFT?

To counter the dollar, the BRICS bloc is also developing BRICS Pay and alternative financial messaging systems in order to reduce its economic dependence on the Western-dominated SWIFT network. The bloc aims to interlink four national payment systems that include Russia's SPFS, China's CIPS, India's UPI, and Brazil's Pix, to enable direct, low-cost cross-border transfers without routing through SWIFT.

Reports suggest that no fully unified BRICS payment system exists yet; SPFS and CIPS currently serve as SWIFT's main alternatives. A prototype was demonstrated in Moscow in October 2024, envisioned as an open-source, decentralised messaging system capable of handling high transaction volumes. However, interoperability between these platforms is still in the initial stage, with significant hurdles around message standardisation, security protocols, and differing national regulatory frameworks still unresolved.

So, the proposed digital cross-border payments platform interlinks national payment systems instead of relying on a single dominant currency or Western infrastructure. It comes with a goal to settle cross-border trade using native local currencies, bypassing the US dollar and mitigating the risk of Western sanctions.

It was proposed to turn down the dollar dominance, as the US dollar and SWIFT still command the vast majority of global trade settlements. Basically, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a secure messaging network used by more than 11,000 banks worldwide to facilitate international wire transfers. It is controlled largely by G-10 central banks.