Enhancing Cross-Border Settlement Mechanisms Among BRICS Member States

Following its recent expansion, BRICS has significantly strengthened its economic potential. In 2024, the share of BRICS nations’ GDP based on purchasing power parity (according to the IMF) reached 40.2%, surpassing that of the G7 (28.8%).  Trade turnover between the BRICS nations came to USD 1 trillion.

Under these conditions, establishing an effective cross-border settlement system remains one of the group’s most complex and urgent challenges. Its importance is only growing amid ongoing geopolitical tensions as well as the use of financial infrastructure as a tool of pressure.

One of BRICS’ most notable achievements has been the rising share of settlements in national currencies. As of 2024, local currencies accounted for 65% of trade between member states. However, the BRICS nations differ considerably in their political systems, economic models, and foreign policy goals, which creates hurdles for developing unified approaches to cross-border cooperation. The lack of mutual recognition of standards and agreed-upon rules for regulating financial services further complicates efforts to streamline settlements.

Despite the growing use of national currencies, most BRICS currencies—with the exception of the Chinese Yuan—suffer from limited liquidity. Moreover, existing settlement systems remain integrated into Western infrastructure, and even when national currencies are used, some transactions are processed through correspondent accounts in US banks, increasing their exposure to secondary sanctions.

The expansion of BRICS membership has significantly boosted the potential for mutual trade. The inclusion of oil-exporting countries like Iran and the UAE has created foundations for expanding settlements for petroleum product deliveries in currencies beyond the US dollar. Additionally, the UAE brings a highly developed financial sector and experience in building payment systems, which can be instrumental in implementing new cross-border settlement mechanisms.

However, varying levels of economic development and financial infrastructure among the BRICS members pose challenges for the integration of payment systems. Some newer members, such as Ethiopia, are currently addressing urgent issues like poverty, high inflation, and political instability, which limits their capacity to engage fully in financial initiatives.

Under Russia's BRICS Chairship in 2024 and through its active engagement, the following directions for developing cross-border settlements were proposed, jointly approved by member states, and incorporated into the Kazan Declaration:

 

• BRICS Cross-Border Payments Initiative (BCBPI)
• BRICS Bridge

 

 

The BCBPI outlines a set of shared approaches to cooperation in the payments sector, aimed at establishing a new supranational payment infrastructure.

 

Key objectives of the BCBPI include:

 

• Expediting and simplifying cross-border payments among the BRICS nations
• Developing common rules and standards, enhancing payment transparency
• Fostering innovation by introducing new tools for financial institutions
• Increasing the use of national currencies in cross-border transactions
• Improving interoperability between the national payment infrastructures of the BRICS nations

 

BRICS Bridge is an international payment system, featuring a financial messaging mechanism, that will operate independently of traditional banking infrastructure and existing networks, including SWIFT. This system will leverage digital financial assets issued by central banks, all pegged to the national currencies of the BRICS member countries.

While specific details about the BCBPI and BRICS Bridge remain under wraps due to their sensitivity to sanctions, it is reasonable to infer that the BRICS Bridge project is still in its early stages. The foundational concepts and settlement mechanisms are currently being approved, but launching the platform will necessitate revisions to the national legislation of the BRICS nations.

Several other projects have been explored at the level of working groups under the BRICS Business Council: BRICS Pay, the Decentralised Cross-Border Messaging System (DCMS), and UNIT, a decentralised payment system.

BRICS Pay is a decentralised multi-currency international payment system. Its C2B functionality will enable international tourists in Russia and Russian travelers abroad to pay for goods and services without opening a local bank account. By linking a bank card from one of the international payment systems to the service, payments can be processed using QR codes. Pilot tests of the C2B BRICS Pay functionality took place during the BRICS Business Forum in Moscow in October 2024.

Meanwhile, the B2B functionality of BRICS Pay, which will facilitate cross-border payments for businesses, is currently in development. This system will act as a payment gateway, connecting existing payment channels. When a transfer request is made from one jurisdiction to another, BRICS Pay will determine the most efficient route for processing the transaction.

The Decentralised Cross-Border Messaging System (DCMS) represents a universal, open-source framework based on distributed ledger technology. DCMS will enable the transmission of financial messages in SWIFT format for international transfers in any currency, including central bank digital currencies. This system is designed to ensure that no participant can be isolated under external pressure, such as regulatory actions.

UNIT is a decentralised payment ecosystem anchored in a blockchain platform. Within this framework, participants can issue and exchange UNTs, units of account pegged to gold and BRICS national currencies. Several potential technology partners for the project have been identified both in Russia and internationally.

During the XVII BRICS Summit in Rio de Janeiro that took place in July 2025, the importance of ongoing discussions regarding the BRICS Cross-Border Payments Initiative (BCBPI) was reaffirmed, accompanied by the presentation of the Technical Report: BRICS Cross-Border Payments System, which "reflects members’ revealed preferences, and should play a pivotal role in our efforts to facilitate fast, low-cost, more accessible, efficient, transparent, and safe cross-border payments among BRICS countries and other nations."

Thus, despite the current challenges, the establishment of an independent cross-border settlement system within BRICS is not only progressing but is becoming an irreversible trend. The driving forces behind this process include the undeniable economic needs of the participating nations and the ongoing attempts to leverage the existing financial infrastructure and the US dollar as instruments of geopolitical pressure.