BRICS+ Think Tank Report Advises Cross-Border Payment System, Cites Hurdles for Common Currency

BRICS+ nations should prioritize the implementation of a joint cross-border payments mechanism to lower their dependence on the US dollar, according to a recent report published on Friday. The policy paper was released by the non-profit policy platform BRICS+ Thinking, which focuses on the expanded bloc of emerging economies including Brazil, Russia, India, China, and South Africa.

Authored by Gregory T. Chin, Danny Quah, and Jim O'Neill—the former Goldman Sachs economist who originally coined the BRICS acronym—the report urges central banks within the grouping to embrace this goal and establish the necessary technical infrastructure to support the mechanism.

Integrating financial infrastructure and enhancing cross-border payment efficiency has been a long-standing item on the BRICS agenda, though progress has historically been limited. During a summit in India, BRICS leaders stated their intention to continue exploring faster and cheaper cross-border payment options, including linking existing payment systems and promoting the use of local currencies.

Conversely, the report cautions that introducing a shared currency would demand extensive reforms across member countries. These requirements include establishing central bank independence, creating a common monetary authority, and easing restrictions on capital flows.

The authors stated that the initial outlook for a BRICS+ currency remains unfavorable, noting that it would need to be freely convertible both domestically and internationally under current policies. Additional obstacles cited include the geographical dispersion of member nations and a lack of willingness to surrender policy autonomy to a centralized authority.

Discussions regarding alternatives to the US dollar have drawn external scrutiny. US President Donald Trump has previously threatened 100% tariffs on member states if they proceed with creating a common currency or backing an alternative to the US dollar.

While BRICS currently lacks a shared currency—with members like India and Russia downplaying the likelihood of one—efforts to decrease reliance on the greenback have accelerated globally. This momentum follows Western sanctions imposed on Russia following its full-scale invasion of Ukraine in 2022.

"The findings of this report highlight the practical complexities involved in reshaping global financial infrastructure. While localized trade mechanisms and cross-border payment links are increasingly feasible and actively pursued by emerging economies, a unified currency requires a degree of macroeconomic alignment and political consensus that remains a distant prospect. Businesses and financial institutions operating internationally should closely monitor these shifting payment corridors as nations seek to diversify their transactional frameworks." — Dr. Shishir Gupta, Founder & CEO, StartupLanes