On January 2, 2026, after months of leaks and diplomatic maneuvering, the BRICS+ bloc (Brazil, Russia, India, China, South Africa, plus Saudi Arabia, the UAE, Egypt, and Iran) announced the pilot launch of BRICS Pay. This system is not merely a new payment platform; it is a formal declaration that dollarization is no longer an inevitable choice, but rather a political option that can be circumvented through blockchain technology and central bank digital currencies (CBDCs). In the following report, we analyze the mechanisms, implications, and risks facing the global economy in the era of monetary multilateralism.
BRICS Pay Mechanisms: How Does the System Actually Work?
Technical Architecture
- Unified Ledger: A distributed ledger managed by the central banks of member states, recording all transactions in local currencies (CNY, RUB, SAR, EGP, etc.).
- Smart Swap Mechanism: Enables currency exchange in less than 4 seconds at an exchange rate determined by a decentralized smart contract, eliminating the need for an "intermediary dollar."
- Post-Quantum Encryption: Provides protection against future hacking and makes asset freezing by an external party (such as US sanctions) virtually impossible.
Cost Savings
BIS Estimates: Transfers via BRICSPay are 40% cheaper than SWIFT, with a time lag of 3-5 seconds compared to 1-3 days. This advantage alone is enough to attract small and medium-sized enterprises (SMEs) burdened by US reserve requirements and bank fees.
Shifting Central Bank Reserves: A Flight from the Dollar?
- The proportion of gold in emerging market treasuries rose to 18% by early 2026 (compared to 8% in 2015), coinciding with a 12% reduction in US Treasury bond holdings in just twelve months.
- The People's Bank of China has begun converting a portion of its deposits into the digital yuan (e-CNY) and distributing it to BRICS Pay partners as initial liquidity for the platform.
- Saudi Arabia announced it will accept the yuan and the euro in a portion of its crude oil invoices starting in the second quarter of 2026, a move that effectively ends decades of the petrodollar's reliance solely on the dollar.
Implications for Emerging Markets
Advantages
- Reduced Currency Risk: Countries indebted in dollars (Pakistan, Turkey, Bangladesh) can now finance their oil imports in yuan or rubles.
- Attracting New Investments: Chinese and Russian companies are announcing expansion plans in their local currencies, reducing hedging costs.
Disadvantages
- Dollar Debt: The value of dollar-denominated debt will remain stable, while local currencies may experience fluctuations, increasing the debt service burden.
- Inflation in Imports: Any decline in the dollar could make importing Western technologies more expensive for non-US countries.
The Arab Role: Between Petrodollars and BRICS Dollars
- Saudi Arabia and the UAE are vying for a "leadership seat" in the platform's management, granting them veto power over any currency settlement or new membership decisions.
- Cairo is using the platform to finance its imports of Russian wheat in rubles, thus circumventing its dollar shortage.
- Security Concerns: Washington warned Riyadh that adopting BRICS Pay in the oil deals under consideration could affect US defense guarantees, but the Saudi response emphasized that "economic security" is no longer separate from "food and energy security."
Global Risks: Are We Facing Financial Fragmentation?
- The IMF warns of "liquidity fragmentation": The existence of two separate markets (SWIFT & BRICS Pay) could raise the cost of global trade by 5-7%, according to its initial estimates.
- Money Laundering: Divergent Know Your Customer (KYC) reporting standards could create "grey islands" that are difficult for regulators to track.
- Data Crisis: Multinational corporations may be forced to manage accounts in different currencies, complicating earnings reporting and increasing hedging risks.
Scenarios until 2030
Most Likely Scenario: Controlled Monetary Multilateralism
- 2026-2027: Completion of the pilot program and the addition of 12 more countries (Turkey, Indonesia, Nigeria).
- 2028: Signing of a Memorandum of Understanding with the European Union to establish a currency bridge (yuan-euro) ensuring the continuation of bilateral trade.
- 2029-2030: Daily transaction volume reaches $3 trillion (equivalent), representing 18% of total SWIFT transactions.
Pessimistic Scenario: Technological-Monetary Race
- Failure to reach common regulatory standards → Money laundering surge → US-EU sanctions on participating institutions → Slowdown in global trade. Optimistic Scenario: Full Convergence
- The IMF adopts a Digital SDR marketed through BRICS PAY, eliminating the need for the US Federal Reserve as the ultimate settlement currency.
A New Era, But Not Without Risks
2026 is not just the year a payment platform launches; it is the moment when a group of countries declares monetary sovereignty an inalienable right. BRICS PAY gives developing countries a weapon to defend their economies against the volatility of US monetary policy, but it is still in its infancy and needs:
- Unified regulatory standards,
- Transparent liquidity management mechanisms,
- Currency bridges with the West to prevent complete fragmentation.
The world is moving towards monetary multiplicity, and if the experiment succeeds, we will mark 2026 as the end of dollar hegemony and the beginning of digital currency multiplicity. Investors and companies must reassess their strategies; the dollar won't disappear tomorrow, but it is no longer the only option.
