Prospects for a Unified BRICS Payment System: Sketching the Contours and Identifying the Challenges

The main task of BRICS in the financial sphere is not to create a single currency, but to shape a pragmatic and interoperable payment architecture that provides businesses with reliable, fast, and cost-effective cross-border settlements while preserving the monetary sovereignty of member states.

Pragmatism Instead of Financial Confrontation

From a Single Currency to an Interoperable Architecture

The prospects for developing a unified payment system in the format at issue are considerable, though it is necessary to distinguish between a unified payment system and a single BRICS currency. A single currency remains a long-term and politically difficult task. The association’s members have different monetary regimes, degrees of capital account overtness, inflation dynamics, regulatory systems, and strategic priorities.

In fact, the current official discussion centers mainly on reducing transaction costs, expanding settlements in national currencies, and exploring compatible payment instruments and platforms, rather than on introducing a single currency. A more realistic goal is the formation of an interoperable BRICS payment architecture that would link up national systems while preserving the monetary sovereignty of each participant.

Contours of a Compatible Payment System

Such an architecture could include several complementary elements: direct settlements between authorized banks in national currencies; interoperability between national fast payment platforms; common technical standards for messaging, identification, and compliance; central bank currency swap agreements to provide liquidity; clearing mechanisms to manage........

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