Seeds of Wisdom RV and Economics Updates Wednesday Afternoon 10-1-25
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BRICS Dollar Devaluation Path Strengthens With New Payment Systems
As BRICS builds alternative payment rails and leans on gold reserves, the move toward a multipolar financial order accelerates — with profound geopolitical and economic consequences.
Payment Infrastructure Advances: Beyond Talk to Action
BRICS is pushing forward with BRICS Pay, a decentralized cross-border payment messaging system designed to bypass Western-controlled networks like SWIFT, allowing member nations to transact in local currencies.
During the Rio de Janeiro deliberations, the bloc proposed a guarantee fund to support local payments and integrate them into BRICS Pay.
These systems aren’t theoretical — they are intended to make dollar-free trade routable, reliable, and scalable across BRICS and select partner states.
De-Dollarization Backed by Gold & Local Currency Trade
🔹 Gold as a Pillar
BRICS nations now hold over 6,000 tons of gold — nearly 20–21% of global central bank reserves. Russia and China lead, owning ~74% of the bloc’s gold reserves.
The gold buffer acts as a shield against sanctions, dollar volatility, and external pressure while anchoring confidence in new payment systems.
🔹 Local Currency Settlement
Trade between BRICS nations increasingly uses national currencies instead of the U.S. dollar, reducing the need for dollar liquidity or FX hedging.
The New Development Bank (NDB) now plans to issue its first Indian rupee-denominated bond, aiming to raise ~$400–$500 million in India, as part of a strategy to internationalize BRICS member currencies.
Challenges & Friction in the Shift
🔹 Institutional & Network Effects
The U.S. dollar remains deeply entrenched in global trade: used in nearly 90% of FX trades and ~48% of SWIFT payments.
De-dollarization faces headwinds: liquidity fragmentation, exchange risk, and the higher cost of managing multiple currency rails.
🔹 Uneven Commitment Among Members
India has publicly stated de-dollarization is “not part of India’s financial agenda”, emphasizing bilateral local-currency trade instead.
Some BRICS members remain wary of overextending—too rapid a shift could destabilize economies, especially those with debt pegged to USD or who still rely heavily on U.S. trade and investment.
How This Fits Into Broader Global Restructuring
🔹 Redistribution of Financial Power
By operating an independent payment network and backing it with gold, BRICS is carving out financial sovereignty zones less subject to U.S. pressure or SWIFT control.
🔹 Erosion of Dollar Leverage
As BRICS transactions move off dollar rails, demand for USD as a settlement, reserve, and liquidity asset may decline — weakening the mechanisms by which the U.S. exerts financial influence.
🔹 Multipolar Payment Networks
Instead of one monolithic financial system, we may see overlapping networks (BRICS Pay, CIPS, mBridge, regional CBDC links), each with their own control nodes, rules, and dominant currencies. The world becomes less unified and more plural in financial architecture.
🔹 Gold & Currency Strategy as Influence Tools
Holding gold gives BRICS credibility; issuing debt in local currencies gives them leverage. These instruments become tools of diplomacy and alignment, not just balance sheet items.
Key Takeaway
BRICS is not just talking about breaking dollar dominance — it is constructing the alternatives. Payment systems, gold reserves, and currency internationalization converge in a push to remake global finance. What once seemed speculative is now engineering realignment of power.
This is not just politics — global finance restructuring before our eyes.
@ Newshounds News™ Exclusive
Sources:
Watcher.Guru – BRICS Dollar Devaluation Path Strengthens With New Payment Systems Watcher Guru
InvestingNews – How Would a New BRICS Currency Affect the US Dollar? Investing News Network (INN)
Nestmann – The BRICS De-Dollarization & What It Means for Gold The Nestmann Group
Brasil de Fato – BRICS leaders propose alternative payment system to SWIFT Brasil de Fato
Reuters / News – BRICS-backed NDB plans first rupee-denominated bond Reuters
Wikipedia – BRICS Pay Wikipedia
Carnegie / Policy analyses – Challenges to de-dollarization and structural headwinds CIRSD
Additional academic insight – Geopolitical Tensions & Financial Networks: Strategic Shifts Toward Alternatives arXiv
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