BRICS+ Payments After mBridge: Plumbing Without a Pipeline

Why this matters now #

The Kazan summit (22 to 24 October 2024) was the first BRICS+ gathering after the bloc absorbed Egypt, Iran, the UAE, and Ethiopia. Argentina declined the invitation and Saudi Arabia remains in observer posture, but the expanded membership covers roughly 35 percent of global GDP at PPP and a comparable share of crude exports. The official declaration committed to studying BRICS Pay (a retail QR-code interoperability layer), a depository concept named BRICS Clear, and the increased use of national currencies in mutual trade. Critically, paragraph 65 of the declaration did not endorse a common BRICS currency, deferring that question indefinitely.

Within nine days of the summit, on 31 October 2024, BIS General Manager Agustin Carstens used a Financial Times op-ed to confirm that the BIS Innovation Hub had completed its work on Project mBridge and would not participate further. Carstens cited the platform's graduation to a minimum viable product as the rationale, but the timing and the public framing signaled discomfort with mBridge being read as sanctions-evasion infrastructure. The five remaining central banks (PBoC, HKMA, Bank of Thailand, Central Bank of the UAE, Saudi Central Bank) confirmed they would continue, with the PBoC Digital Currency Institute taking the lead operator role.

For corporate treasurers, sanctions compliance teams, and EM bank CFOs, the policy noise has outrun the plumbing. The question for 2026 is not whether BRICS+ will displace the dollar, it will not within this planning horizon, but where the marginal payment is moving onto bilateral rails (CIPS, SPFS, UPI linkages, mBridge) and what that implies for working-capital cost, counterparty exposure, and secondary-sanctions risk.

The state of the rails #

China's Cross-Border Interbank Payment System (CIPS) is the most institutionally mature non-Western rail. The PBoC's June 2024 update reported 142 direct participants and 1,394 indirect participants across 119 jurisdictions, a roughly threefold increase in indirect participation since 2020. Direct participants settle on CIPS books in real time, indirect participants typically clear via a direct-participant correspondent. Yet CIPS still relies on SWIFT for a large share of its messaging (CIPS adopted ISO 20022 natively but most international counterparties send instructions via SWIFT MT and MX), so the operational substitution is partial.

Russia's System for Transfer of Financial Messages (SPFS), operated by the Bank of Russia, is a messaging layer rather than a settlement system. After the 2022 SWIFT disconnection of major Russian banks, SPFS membership grew to roughly 600 institutions across 20-plus countries by late 2024 (Bank of Russia disclosures), but most foreign members are subsidiaries of Russian groups or banks in Belarus, Kazakhstan, Kyrgyzstan, Armenia, and Iran. SPFS lacks the multilateral reach of SWIFT and the settlement depth of CIPS.

India's Unified Payments Interface (UPI) has taken a different route. The National Payments Corporation of India has signed cross-border interoperability agreements covering live use in the UAE, Singapore, France (acquirer-side at the Eiffel Tower and select merchants), Sri Lanka, Mauritius, Bhutan, and Nepal. UPI is a retail rail and does not solve corporate B2B settlement, but it is the highest-volume non-Western consumer payments network and a credible template for retail BRICS Pay interoperability.

Brazil's PIX, also a retail instant-payments system run by the BCB, has been pitched for cross-border extension via the Drex CBDC pilot. Drex was originally explored as a candidate for mBridge integration, but Brazil's central bank has kept the two tracks separate, with Drex still in domestic wholesale pilot phase as of Q1 2026.

What mBridge actually does, and what it does not #

Project mBridge is a permissioned distributed-ledger platform that lets participating central banks issue and exchange wholesale CBDC tokens directly, bypassing correspondent-bank chains. In 2022 to 2023 pilots, the platform processed real-value transactions across more than 160 corporate participants and 30 commercial banks, with settlement times measured in seconds and notional volumes in the low hundreds of millions of US dollars equivalent. The technical case is sound: PvP settlement on a shared ledger removes Herstatt risk and compresses fees on corridors where correspondent depth is thin.

The strategic case is more contested. Carstens framed the BIS exit on completeness grounds, but Western policymakers had grown publicly uncomfortable with mBridge being marketed (notably at Russian-hosted forums in mid-2024) as a sanctions-resilient channel. Without BIS as institutional anchor, mBridge faces three open questions: governance (who arbitrates a partner exit or a sanctions-driven freeze), liquidity (each participating CBDC is only as useful as the FX market behind it), and onboarding (the platform's value rises non-linearly with corridors covered, but BRICS-aligned expansion adds geopolitical risk to Western counterparties).

For 2026, mBridge is best understood as a high-quality bilateral-to-quintilateral wholesale CBDC corridor for energy, commodities, and a narrow set of Belt and Road trade flows, not as an emerging global standard. Saudi Arabia's late-2023 accession was the most consequential addition (because of oil invoicing), but Riyadh has continued to settle the bulk of its crude trade in dollars.

Dollar dominance: where the data actually sits #

Headlines about de-dollarization need to be checked against four hard datasets: SWIFT message share, IMF COFER reserve allocation, BIS triennial FX turnover, and trade-invoicing surveys. On the SWIFT RMB Tracker (September 2024), the dollar accounted for 47.0 percent of customer and institutional payments by value, the euro 22.3 percent, sterling 7.0 percent, the yen 4.0 percent, and the renminbi 4.69 percent. The renminbi share is up from roughly 1.9 percent in 2020 but has plateaued since hitting an all-time high of 4.74 percent in November 2023.

On reserves, the IMF Currency Composition of Foreign Exchange Reserves (COFER) for Q3 2024 put the dollar at 57.4 percent of allocated reserves, the euro at 20.0 percent, the yen at 5.8 percent, sterling at 5.0 percent, and the renminbi at 2.2 percent. The dollar share has fallen from roughly 71 percent in 1999 and roughly 66 percent in 2014, but the decline since 2020 has been gradual (around 1 percentage point) and the gainers have been smaller reserve currencies (AUD, CAD, KRW, SGD), not the renminbi.

On FX turnover, the 2022 BIS Triennial Survey (the next is published in late 2025 to early 2026 with reference data for April 2025) showed the dollar on one side of 88.5 percent of trades and the renminbi on 7.0 percent. Preliminary BIS commentary through 2025 suggests dollar dominance in turnover has been remarkably stable.

The composite picture is one of incremental rebalancing at the edges, not regime change. Where the renminbi has gained meaningful share is in bilateral trade invoicing with Russia (now reportedly above 90 percent for goods trade per Bank of Russia data) and in a subset of Belt and Road project finance. These are real shifts, but they are concentrated in corridors where the dollar is politically unavailable rather than economically uncompetitive.

Sanctions weaponization and the substitution ceiling #

The strategic motivation for BRICS+ payments work is the perceived weaponization of dollar clearing. The OFAC Specially Designated Nationals list grew to roughly 12,000 entries by December 2024 (Treasury data), with the largest additions tied to Russia (post-February 2022) and Iran. Secondary sanctions, especially the December 2023 executive order authorizing penalties on foreign financial institutions facilitating Russia's military-industrial base, and continued use of Section 311 of the PATRIOT Act, have raised the compliance cost of any ambiguous corridor.

Yet the substitution ceiling remains high. Three structural features anchor the dollar: depth of US Treasury markets (the only sovereign debt market that can absorb crisis flight-to-quality at scale), the breadth of dollar trade-finance instruments (letters of credit, documentary collections, supply-chain finance), and the swap-line architecture (the Fed's standing arrangements with five major central banks plus reactivatable lines). No BRICS+ alternative comes close on any of these three axes in 2026.

Operationally, this means the substitution is not from dollars to renminbi but from dollars to local-currency-against-local-currency. The growth segment is bilateral Russia-China, China-Brazil, China-Saudi Arabia, India-UAE, and intra-ASEAN local-currency settlement, not multilateral pooled liquidity. That growth is real, durable, and material for treasurers in those corridors, but it does not aggregate into a rival reserve system.

Implications for treasury, compliance, and EM banking #

For corporate treasurers active in BRICS+ corridors, the planning baseline through 2027 should assume continued dollar centrality for working-capital and supply-chain finance, with selective onboarding of CIPS direct or indirect participation for renminbi-denominated trade with mainland Chinese counterparties. UPI cross-border merits attention for retail-facing businesses in the seven live jurisdictions, particularly for Indian diaspora remittance flows and tourism receipts. Drex and PIX international remain pilots, not production options, in 2026.

For sanctions compliance teams, the 2026 risk surface is dominated by secondary sanctions on Russia-linked corridors and on Iran's reintegrated BRICS+ status. Counterparty due diligence should now include screening for SPFS membership as a yellow-flag indicator (not a bar in itself, but a signal warranting enhanced due diligence) and for direct mBridge participation through PBoC, HKMA, BoT, CBUAE, or SAMA wholesale CBDC channels. The OFAC 50 Percent Rule and EU equivalent provisions continue to require ultimate beneficial-owner sweeps that BRICS+ rails do not change.

For EM bank CFOs, particularly in jurisdictions weighing CIPS direct membership or SPFS connection, the cost-benefit shifts case by case. Direct CIPS membership requires a substantial onshore renminbi position and a PBoC-acceptable risk profile, but cuts correspondent fees on China trade by 30 to 60 basis points on typical letter-of-credit flows (industry estimates from Asian Banker and Reuters reporting, 2024 to 2025). SPFS connection delivers narrower commercial value and meaningful Western-correspondent risk; only banks with an unavoidable Russia franchise should consider it.

The strategic recommendation is to treat BRICS+ payment infrastructure as an optionality portfolio, not a directional bet. Dollar-centric playbooks remain the base case, but the cost of being unprepared for a corridor-specific switch (e.g., a sanctions-driven loss of correspondent access, or a supplier-driven RMB invoicing demand) has risen materially. The right 2026 investment is in messaging-format flexibility (ISO 20022 native readiness across SWIFT, CIPS, and SPFS), in legal-entity structuring that preserves corridor optionality, and in real-time sanctions screening that can absorb new SDN entries within hours rather than days.

Sources #

• BRICS Kazan Declaration, 23 October 2024
• Agustin Carstens, BIS withdraws from mBridge, Financial Times op-ed, 31 October 2024
• BIS Innovation Hub, Project mBridge reaches MVP, 5 June 2024
• PBoC, CIPS Participants Update, June 2024
• SWIFT RMB Tracker, September 2024
• IMF COFER Q3 2024 release
• Bank of Russia, SPFS Statistics 2024
• NPCI International, UPI Global Acceptance
• BIS Triennial Central Bank Survey 2022
• US Treasury OFAC, Specially Designated Nationals List
• Atlantic Council Geoeconomics Center, Dollar Dominance Monitor
• Reuters, BRICS leaders push payments alternative at Kazan, 23 October 2024
• US Executive Order 14114, Russia secondary sanctions, 22 December 2023