20260302 Die BRICS Alternative zu SWIFT

India is working on a global payment system

It is not China but India that is the driving force behind the development of an alternative payment system. Until now, transactions between countries were often made via conversion into US dollars or were even only possible using actual dollar balances. The dollar has lost this special privilege due to its huge accumulated debt mountains and, most recently, its constant policy of sanctions against other countries.

India took over the chairmanship of the BRICS group of countries in 2026 and now wants to initiate a link between the digital central bank currencies of Brazil, Russia, China, and South Africa, as well as the United Arab Emirates, Iran, Egypt, Ethiopia, and Indonesia. The aim is to facilitate payments for trade and tourism.

Each of the currencies involved remains under the control of the respective national central bank. Each currency is directly convertible into any other currency without conversion into US dollars. Similar to the Bank for International Settlements, transactions are carried out according to the payment-versus-payment principle. This means that each payment is processed simultaneously and definitively by both sides for a specified period of time.

This means that there are no settlement or fulfillment risks for either party involved, and the amounts of money physically moved remain low. This approach differs fundamentally from the Western SWIFT system, which is purely a messaging system that transmits payment instructions between banks. The BRICS model, on the other hand, carries out direct value transfers and final settlement in the respective national currencies, as telepolis.de writes. Transactions, including those with digital wallets, are settled immediately with blockchain technologies.

The ISO 20022 business protocols for instruction flow, verification, and regulatory reporting must continue to be fulfilled. The devil will be in the details. Various currencies involved are not fully convertible. The financial laws, data protection regulations, cybersecurity standards, and digital infrastructure of the countries involved also vary considerably. The outcome will be interesting to see.

Translated with DeepL.com (free version)