BRICS Growth: SWIFT Payment System & US Dollar at Risk

• The BRICS Expansion And Its Impact on Global SWIFT Transactions
• BRICS: A Threat to SWIFT and the US Dollar?
• Trade Group Enhancement and the Attraction of Alternatives
• BRICS: A Shift From SWIFT System And US Dollar Payments
• Effect of Sanctions on Russia and Iran

The BRICS Expansion And Its Impact on Global SWIFT Transactions

The latest expansion of BRICS might result in a reduction in global SWIFT transactions, potentially impacting the US dollar. The 9-member BRICS alliance has plans to discontinue cross-border settlements via SWIFT using the US dollar, opting instead to pay in local currencies. This strategy places additional pressure on the SWIFT payment system and might lead to a decrease in US dollar-based settlements by BRICS.

BRICS: A Threat to SWIFT and the US Dollar?

Florida Senator Marco Rubio was the first to issue a warning about the potential threat BRICS could pose to SWIFT and the US dollar. The expansion of BRICS could result in more countries severing ties with both the US dollar and the global SWIFT payment system. Rubio stated that BRICS's members collectively manage foreign currency reserves and provide substantial loans to developing nations, which could potentially incite opposition towards the US and other Western nations. The senator emphasized that the expansion would provide BRICS with more power to challenge the SWIFT system and the US dollar.

Trade Group Enhancement and the Attraction of Alternatives

Rubio further commented, This doubling in the trade group's size bolsters its appeal as an alternative to the American and European-led financial system.

BRICS: A Shift From SWIFT System And US Dollar Payments

Earlier this year, two BRICS members, Russia and Iran, officially ceased using the SWIFT payment system for trade between themselves. Instead, Russia and Iran agreed to conduct transactions directly via banks and decided to settle trades in local currency, moving away from the US dollar.

Effect of Sanctions on Russia and Iran

Both Russia and Iran were excluded from SWIFT following the imposition of sanctions by the US against these two countries. This led both nations to find alternatives to the US payment system rather than returning to SWIFT. Gradually, all BRICS members are exploring alternative options to decrease their reliance on SWIFT and the US dollar.

Edited by Jonathan Stoker