BRICS and the New Era of Global Finance: Insights from Dr. Vidhu Shakar on the Path Beyond SWIFT

Dr. Vidhu Shekhar explores BRICS’ efforts to develop a SWIFT alternative, offering emerging economies a route to financial autonomy and stability beyond the dollar.

As debates around global de-dollarization gain traction, the BRICS nations are working toward an alternative payment system. At the forefront of this evolving landscape is Dr. Vidhu Shekhar, a distinguished economist with deep insights into international finance. In an interview on our YouTube Channel Think BRICS, Dr. Shekhar unpacked the BRICS bloc’s ambitions, the motivation for a new payment network, and the immense challenges that lie ahead. This conversation reveals not only the economic stakes but also the potential reshaping of global finance.

Why BRICS Seeks an Alternative to SWIFT

For years, the SWIFT system has dominated international payments, channeling the bulk of global trade in US dollars. This structure has allowed the United States to wield significant economic power over world trade, often to the detriment of other nations. Dr. Shekhar points to examples of dollar-dependent economies, like Pakistan and Sri Lanka, that have faced severe economic crises simply because of shifts in US policy. When the US Federal Reserve raises interest rates, for instance, the resulting spike in the dollar’s value can raise the cost of essential imports in other nations, putting severe strain on their budgets.

Dr. Shekhar emphasized that the drive for a BRICS payment network isn’t just about geopolitics—it’s a pressing economic necessity. “It’s not just sanctioned countries that are vulnerable,” he said. “Dollar volatility is impacting everyone, and with it, the ability of countries to protect their own economic stability.” The BRICS initiative seeks to provide a stable alternative, allowing nations to conduct trade without relying on the dollar.

Challenging the Dollar - But Not Replacing It

While the BRICS network could challenge the dollar’s dominance, Dr. Shekhar argues that the aim isn’t to dismantle it. “The goal is to create a parallel system, not to end dollar transactions,” he clarified. “Economic theory suggests that monopolies, including financial ones, should be broken to increase choice and stability.” Just as global credit card networks benefit from competition, so too would international trade, currently dominated by the SWIFT system.

Critics argue that this push for an alternative network is driven by Russia’s struggle under Western sanctions. But Dr. Shekhar dispels this as a simplistic view. He contends that even countries not affected by sanctions, like India, have legitimate concerns over dollar dependency. “Having another option isn’t about being anti-Western or anti-dollar. It’s about allowing countries the flexibility to manage their economies independently,” he said.

Building BRICS Clear: A Complex Undertaking

Creating a payment network on the scale of SWIFT comes with formidable challenges. First, there’s the practical difficulty of undoing the dollar’s deep-rooted integration into global trade, insurance, and banking. The established protocols and logistics tied to dollar-based transactions make it a daunting task to implement a competing system from scratch.

A further challenge lies within the BRICS bloc itself, a grouping of economies with varied political and economic landscapes. Some analysts argue that internal differences could undermine BRICS’ ability to collaborate on a shared system. Dr. Shekhar, however, sees this as an advantage. Unlike politically driven alliances, BRICS is united solely by economic interests, which allows the group to focus on shared financial goals without needing to resolve unrelated issues. “BRICS nations don’t have to agree on everything,” he noted. “They just have to agree on what’s good for their economies.”

The Case for “BRICS Clear”

One proposed component of the BRICS initiative is “BRICS Clear,” a centralized payment system that could eliminate many of the redundancies created by current bilateral trade agreements within the bloc. Currently, BRICS nations are using individual arrangements to conduct trade in their own currencies—such as the rupee-ruble agreements between India and Russia. While effective, this piecemeal approach lacks scalability and efficiency.

Dr. Shekhar explained that a centralized BRICS payment system could streamline transactions, reducing the need for separate accounts and duplicated infrastructure. In the long term, he speculates, BRICS could even introduce a “BRICS coin” to further ease intra-bloc payments. However, such a currency would require complex negotiations to establish its valuation—a hurdle that BRICS members have yet to overcome.

China’s Nuanced Approach

China’s stance on the BRICS payment network is particularly intriguing. As a global trade giant, China is heavily invested in the dollar-based SWIFT network due to its extensive trade with the United States. However, China also sees value in diversifying its payment options and has shown cautious support for the BRICS initiative. “China’s dual approach is more about hedging than abandoning the dollar,” Dr. Shekhar observed. “They want to support a new system while ensuring that their dollar-based trade remains stable.”

China’s balanced position underscores that BRICS is not attempting to replace the SWIFT network but rather to complement it. By offering an alternative, the BRICS bloc could gain flexibility without needing to overhaul established trade relationships or provoke tension with Western nations.

The Broader Implications: Why BRICS Matters for Global Finance

The drive for a BRICS payment network reflects an urgent need for financial independence among emerging economies. The dollar’s central role as the global reserve currency forces other countries to align with US economic policies, regardless of their own needs. For instance, India often has to follow the Fed’s rate hikes to avoid destabilizing its currency. “The BRICS initiative isn’t about the dollar losing its place,” Dr. Shekhar clarified. “It’s about creating space for countries to manage their economies without depending on US policy decisions.”

BRICS Clear could offer member nations some much-needed autonomy, allowing them to adjust monetary policy based on their own priorities. With a functioning BRICS payment system, nations may be able to balance domestic goals with international trade requirements, creating a more resilient global economy.

The Quiet Road Forward

Though the BRICS bloc is moving cautiously, signs of progress are visible. At the recent BRICS summit in Kazan, there was no grand announcement about a SWIFT alternative, but incremental developments were noted, including a plan for a “BRICS Reinsurance” framework to protect traded goods. This pragmatic approach, as Dr. Shekhar pointed out, may actually be more effective: “Sometimes, quietly building the infrastructure first and announcing it when it’s ready is the best approach.”

The path to a fully operational BRICS payment system will take time, but its momentum is undeniable. While the BRICS bloc may not aim to disrupt the dollar's position overnight, it is laying the groundwork for a substantial shift in the financial landscape. The steady development of BRICS Clear and other related projects indicates that this initiative isn’t merely theoretical but a tangible effort to create a balanced and multipolar financial system.

Potential Challenges and Opportunities with BRICS Clear

In addition to logistical and technical issues, the BRICS payment system will face political hurdles. Developing a reliable and cohesive multilateral payment system among economies as diverse as China, Russia, and South Africa is no small feat. A digital currency, such as the proposed BRICS coin, could simplify transactions across the bloc. Yet, defining and stabilizing the value of such a currency remains a contentious point, especially given the varied economic environments and needs of each BRICS nation.

On the technical side, Dr. Shekhar believes that the world’s financial infrastructure is already advanced enough to support a BRICS system. From a technological perspective, creating a secure, digital ledger-based messaging system similar to SWIFT is not the primary obstacle. The real challenge is aligning all BRICS members under a unified policy framework, ensuring smooth cross-border cooperation, and establishing a digital currency that serves the collective interest.

According to Dr. Shekhar, another layer of complexity lies in global perception and communication. The BRICS bloc will need to reassure the West that this initiative isn’t an attempt to exclude or isolate the dollar but rather to enhance options for international trade. “The messaging has to be clear: this is about financial stability and choice,” he emphasized. For BRICS to succeed, it must strike a delicate balance, presenting itself as a cooperative player on the global stage rather than a direct challenger to the existing order.

Looking Ahead: The Long-Term Vision

In the long run, the BRICS payment system could be a game-changer in international finance, giving nations a reliable, non-dollar-dependent framework for trade. Dr. Shekhar anticipates that while the BRICS payment network may start with a modest share of global transactions, its existence alone will be a powerful tool. “The viability of the system doesn’t rely on instantly capturing market share,” he said. “Just having an alternative breaks the monopoly, giving all countries—not only those in BRICS—a potential escape from dollar constraints.”

For now, BRICS is building a foundation. Recent discussions of reinsurance—a key element in large-scale trade systems—and the quiet progress in technical development suggest a strategy focused on substance over style. Although Dr. Shekhar cautions that a full rollout won’t happen immediately, the initiative is moving steadily toward creating a resilient alternative.

A New Chapter for Global Finance

As Dr. Shekhar noted, “We’re witnessing a once-in-a-lifetime shift in the global financial landscape.” The BRICS payment initiative is more than a financial innovation—it is a step toward empowering emerging economies to have a say in the structures governing global trade. By diversifying the options available to nations, BRICS is paving the way for a more balanced and sustainable financial future.

The journey may be slow and complex, but the ambition is clear: to create a multipolar financial system where countries can operate with a degree of independence from the US dollar’s influence. In a world that increasingly demands stability and choice, BRICS is positioning itself as a vital player in reshaping the global economy.

In his parting words, Dr. Shekhar left us with this thought:

“The real impact of BRICS will be felt not only in how it conducts trade but in the choices it allows other countries to make. This is not just about transactions; it’s about redefining economic autonomy in a highly interconnected world.”