De-Dollarization Is Real - Brazil Just PROVED It

1st August 2025

Brazil has been joining other BRICS and Latin American nations in exploring ways to conduct trade and financial transactions without defaulting to the US dollar. This push stems from concerns over exchange-rate volatility, high transaction costs, and a desire for greater monetary sovereignty in regional commerce.

Drivers Behind the Shift
Reducing dependence on dollar reserves and exposure to US monetary policy swings.

Lowering costs associated with currency conversion and correspondent banking fees.

Strengthening regional integration by promoting local currencies for intra-Latin-American trade.

Responding to political calls—especially from President Lula—to reclaim economic autonomy in a multipolar world.

Key Initiatives
Bilateral Currency Swaps and Credit Lines

Brazil and Argentina have negotiated lines of credit to finance exports and imports in their own currencies rather than dollars, targeting a $6 billion trade loss to China caused by dollar-centric barriers.

BRICS Local-Currency Trade Talks

At BRICS summits, Lula has advocated settling interbloc trade in national currencies, though formal adoption of a single BRICS currency remains off the table.

Proposal for a Latin American "Sur"

Inspired by historical regional clearing agreements, Brazil and peers are studying a unit of account—dubbed the "Sur"—to streamline payments across MERCOSUR members and beyond.

Digital Payment Platforms

Leveraging Brazil's Pix instant-payment system and exploring central bank digital currency (Drex) frameworks to facilitate non-dollar transactions with partners.

Official Skepticism and Challenges
Brazil's Central Bank underscores the dollar's entrenched liquidity and depth, deeming a full dethronement unlikely within the next decade.

The Finance Ministry has publicly denied plans for a single BRICS currency, framing current talks as small-scale cost-reduction measures rather than an abrupt de-dollarization agenda.

Global commodity markets, weighed by pricing and hedging conventions in dollars, pose practical hurdles to a rapid shift.

Outlook
While Brazil continues to pilot local-currency swaps and regional financial mechanisms, analysts expect a gradual evolution rather than a wholesale retreat from the dollar. Ongoing seminars, technical working groups, and digital-platform experiments will determine whether these efforts scale beyond pilot stages.

And then there is PIX
What Is Pix?
Pix is an instant payment platform created and managed by Brazil's Central Bank. It launched on November 16, 2020 and enables real-time transfers of Brazilian reais between transactional accounts (demand, savings, and prepaid) around the clock, including weekends and holidays [10][11]. Transactions settle in seconds with no fees for individuals and minimal costs for businesses.

Key Features and Mechanics
Pix uses "keys"—such as a taxpayer ID number, email address, or phone number—to route payments without needing full bank details [10].

Funds and transaction data travel together, simplifying automation, reconciliation, and traceability for merchants and regulators [10].

The system operates on the Central Bank's Instant Payment System (SPI), meaning any downtime at the Bank affects Pix nationwide in real time.

Pix and De-dollarization Efforts
By enabling seamless real-time transfers in local currency, Pix reduces reliance on costly correspondent-bank networks and US dollar clearing for domestic and regional trade. As Brazil and its partners explore local-currency settlement mechanisms, Pix provides the technical backbone to:

Cut foreign-exchange expenses in intra-regional commerce.

Strengthen monetary autonomy by anchoring transactions in Brazilian reais.

Lay groundwork for cross-border payments without direct dollar intermediation—already piloted in the US iGaming sector via third-party integrators [2].

Looking Ahead: Pix Automático and Beyond
Brazil's Central Bank and private players are extending Pix’s capabilities:

Pix Automático: Launched June 2025 to support recurring payments (e.g., subscriptions), further embedding real-time local-currency flows in everyday commerce [3].

Open Finance Integration: Licensed payment initiators (PISPs) like Boku are gearing up to offer seamless Pix checkouts without redirection, broadening digital-first experiences for unbanked or underbanked consumers [3].

Cross-Border Expansion: Early US deployments aiming at Brazilian diaspora and niche sectors (online betting) are testing compliance, traceability, and currency-conversion frameworks for broader internationalization [2].

Pix stands as a cornerstone of Brazil’s payment revolution—and a strategic tool in reducing dollar dependence.

And then BRIS Pay
BRICS Pay: A Decentralized Cross-Border Payment System

BRICS Pay is an independent, decentralized payment-messaging mechanism launched in 2018 under the BRICS Business Council. It enables member states to send and receive cross-border payments in their own currencies without relying on the US dollar or SWIFT network.

Goals and Purpose
Facilitate secure, transparent, and cost-effective trade settlement among BRICS nations using local currencies.

Reduce exposure to US monetary policy and sanctions risk by minimizing dollar-based clearing.

Strengthen financial sovereignty and cooperation within an expanding BRICS+ community.

System Architecture: DCMS
At its core, BRICS Pay uses the Decentralized Cross-border Messaging System (DCMS), developed by researchers at Saint Petersburg State University. Key attributes include:

Node-based, peer-to-peer network with no single point of control.

End-to-end encryption and digital signatures for secure message transmission.

Automatic route-building to maintain connectivity even if direct paths are down.

Optional transaction fees, participant-set conversion rates, and custom settlement limits.

Throughput of up to 20,000 messages per second on minimal hardware.

Open-source release planned after pilot phases conclude.

Consortium Governance
The BRICS Pay Consortium operates like a decentralized autonomous organization (DAO). It brings together financial, legal, and tech experts from member states, adheres to each nation’s regulations, and forgoes a central headquarters—ensuring equal representation and shared decision-making.

Member Support and Adoption
China gave full backing on October 23, 2024, underscoring its commitment to "de-dollarize" trade.

Russia champions BRICS Pay to bypass sanctions impacting its SWIFT access, while Iran views it as a strategic payment channel.

Brazil, India, and South Africa have publicly endorsed the mechanism as pivotal for a multipolar financial order.

Key Features
Feature Description
Decentralized Messaging (DCMS) Resilient, peer-to-peer network without a central hub
Local-Currency Settlement Direct cross-border payments in national currencies
Encryption & Security Multiple encryption layers and digital signatures
Configurable Fees & Limits Optional transaction charges; participants set conversion rates and maximum transaction sizes
High Throughput Capable of 20,000 messages per second on basic hardware
DAO Governance Consortium-based management; no single HQ; regulatory compliance across member states

Will BRICS Pay Replace SWIFT?

SWIFT’s Global Dominance
SWIFT remains the core messaging network for cross-border bank transactions, connecting over 11,000 institutions in more than 200 countries. Its standardized protocols, high liquidity, and decades-long track record make it deeply entrenched in global finance.

BRICS Pay as a Parallel System
BRICS Pay aims to create a decentralized messaging platform for trade settlements in national currencies among member states. By leveraging technologies from India’s UPI, Russia’s Mir, and China’s digital-wallet frameworks, it promises lower fees, encryption, and resilience against single-point failures.

Barriers to Full SWIFT Replacement
Membership Scope: BRICS Pay currently targets just the BRICS bloc, limiting its network effect compared with SWIFT’s global reach.

Regulatory Alignment: Divergent KYC/AML rules and foreign-exchange controls across member countries complicate seamless integration.

Liquidity and Currency Depth: SWIFT’s dollar-based corridors benefit from unmatched liquidity; replacing these channels requires deep bilateral currency markets that are still under development.

Institutional Adoption: Major correspondent banks and central banks have long-standing SWIFT infrastructure; shifting them to a new standard entails significant operational, compliance, and legal work.

Outlook: Complement, Not Complete Replacement
Analysts expect BRICS Pay to function alongside SWIFT rather than fully supplant it. For BRICS nations, it may gradually eat into intra-bloc messaging volumes and reduce dollar dependency, but a wholesale global takeover is unlikely in the near to medium term