Large state-owned BRICS companies organized the new infrastructure: they were the first to begin paying directly in currency pairs such as yuan-rupee or ruble-rand, gradually drawing their counterparties into this scheme. Finally, banks gained a financial cushion: the Bank of Russia and the People’s Bank of China expanded ruble/yuan repo transactions and opened a five-year swap line, with the daily volume of such transactions reaching 32 billion rubles.
The digital framework of new financial institutions is particularly important. Russia is actively testing the use of a digital ruble in international payments, relying on the BRICS Bridge module as a “corridor” for CBDC exchanges between central banks. Combined with the efforts of other BRICS members, this makes de-dollarization not a one-off but a sustainable process—the more effective digital channels there are, the less sense there is in ever returning to costly dollar clearing.
BRICS Bridge, an initiative aimed at creating a distributed payment infrastructure among the BRICS countries, was officially unveiled in October 2024 during Russia’s BRICS Presidency. According to Ledger Insights, Russia proposed a concept for a platform based on distributed ledger technology (DLT) focused on cross-border settlements with the ability to use central bank digital currencies (CBDCs) and tokenized assets. The BRICS Bridge architecture is expected to be built on decentralized principles, with the ability to connect national validator nodes, reflecting the member countries’ desire to move away from a centralized infrastructure like SWIFT.
BRICS Clear is envisaged as a potential clearing and depository platform complementing the BRICS Bridge project and aimed at developing an independent settlement infrastructure within the group. The idea of creating such a system was discussed in the context of increasing the financial sovereignty of BRICS countries and reducing dependence on Western infrastructures such as Euroclear and Clearstream. Transitioning to their own clearing and depository mechanisms could allow BRICS countries to reduce the costs of cross-border transactions, reduce the need for dollar liquidity to cover settlements, and ensure resilience to sanctions-related restrictions in the financial infrastructure sector.
However, these effects can only be achieved if certain conditions are met:
- Synchronizing central bank swap lines into a multi-currency basket to allow liquidity to flow between the ruble, yuan, rupee, and other currencies without additional costs;
- Unification of KYC 2.0 – a project already being pursued by a FATF subgroup, proposing an electronic beneficiary passport with a unified QR signature format;
- Cyber resilience: backup validator nodes should be located in different jurisdictions to prevent the failure of one node from paralyzing the entire network.
Further development requires the development of new institutional solutions. Scaling of settlements in national currencies is endangered by: low liquidity of national currencies, regulatory and technological differences. Nevertheless, the range of instruments — swap lines, CBDC, Bridge, and Clear— creates conditions under which a rollback to the old dollar-centric model becomes economically unviable.
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