BRICS is no longer just an acronym. With the addition of Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates in 2024, the bloc now spans major energy exporters and two of the world’s largest consumer markets, giving it greater weight in debates over trade, finance and development.
Together, the expanded group accounts for more than 40% of the global population and a growing share of output and commodity flows. Its agenda has sharpened: expand the New Development Bank’s reach, settle more trade in local currencies, and press for a larger voice in institutions such as the IMF and World Bank.
The push tests the durability of a postwar economic order anchored by the dollar and Western-led governance. Whether BRICS can translate ambition into interoperable payment systems, deeper supply-chain links and unified policy positions remains the central question for investors and policymakers tracking the bloc’s next moves.
Table of Contents
- BRICS steers capital to infrastructure green industry and mineral security as development banks expand cofinancing
- Local currency trade settlement accelerates with a roadmap for interoperable payment rails FX liquidity pools and risk hedging
- Policy recommendations adopt shared data and ESG standards deepen local sovereign bond markets and coordinate antitrust enforcement
- Concluding Remarks
BRICS steers capital to infrastructure green industry and mineral security as development banks expand cofinancing
BRICS development lenders, led by the New Development Bank, are channeling larger pools of long-term capital into transport grids, clean manufacturing, and critical mineral value chains as expanded cofinancing with regional banks and export credit agencies accelerates deal flow. New mandates prioritize local-currency lending, blended finance, and project-preparation facilities to derisk private participation, while alignment on safeguards and procurement is shortening timelines for cross-border corridors. The strategy ties infrastructure upgrades to industrial policy-anchoring supply for batteries, solar components, and grid equipment-by backing midstream processing and off‑take agreements that secure inputs like lithium, nickel, and copper and lift regional content in the energy transition.
- Network build-out: cross-border transmission lines, rail corridors, and port modernization to cut logistics costs.
- Green industry: financing for green hydrogen, ammonia, and EV/battery ecosystems, including component manufacturing.
- Mineral security: exploration, midstream processing, and recycling to stabilize supply and pricing.
- Financing tools: local-currency project bonds, guarantees, and sustainability-linked loans to broaden investor participation.
- Standards and governance: harmonized ESG safeguards, transparency in debt terms, and local-content targets to build resilience.
Local currency trade settlement accelerates with a roadmap for interoperable payment rails FX liquidity pools and risk hedging
BRICS finance officials are moving from rhetoric to implementation, aligning cross-border settlement in domestic units with concrete plumbing: interoperable rails built on ISO 20022, API-first gateways that interlink RTGS systems with PvP safeguards, and trial integrations with multi-CBDC platforms such as the BIS-led mBridge; in parallel, regional FX liquidity pools-seeded by central-bank swap lines and anchored by market-makers in Johannesburg, Dubai, Shanghai and São Paulo-are being designed to compress spreads in thinly traded pairs, while standardized risk-hedging toolkits (onshore NDFs, deliverable forwards, cross-currency swaps and central clearing) are positioned to reduce basis risks for energy, metals and agri trades that are increasingly invoiced in local currencies across South-South corridors.
- Interoperability roadmap: Common messaging standards, shared identifiers, real-time sanction/AML screening, and synchronized settlement windows across time zones.
- Liquidity architecture: Pre-positioned collateral, transparent price discovery, and auction-based top-ups to stabilize FX pools during stress.
- Hedging access: Exchange-listed and OTC instruments with harmonized documentation, margining, and netting frameworks to cut counterparty risk.
- Governance and oversight: A cross-border rulebook for dispute resolution, settlement finality, and data-sharing that respects national capital controls.
- Market impact: Lower transaction costs, faster settlement cycles for SMEs, and a measurable shift of commodity trade invoicing toward BRICS currencies.
Policy recommendations adopt shared data and ESG standards deepen local sovereign bond markets and coordinate antitrust enforcement
With BRICS economies shaping a larger share of global capital flows, officials are pivoting to practical steps that improve comparability, lower transaction costs, and curb market power across borders-measures designed to attract long-duration investment without sacrificing market integrity.
- Harmonize data rules and ESG taxonomies: Align disclosures with ISSB standards in machine‑readable XBRL, expose open APIs, and stand up a federated, privacy‑preserving data repository with independent audit trails to cut friction and bolster analytical reliability.
- Strengthen domestic‑currency debt markets: Publish transparent auction calendars, formalize primary‑dealer codes, standardize repo with a regional CCP, enable RTGS interoperability and T+1 settlement, build on‑the‑run benchmarks, expand FX‑hedging and swap lines, and scale labeled green and transition bonds to diversify the investor base.
- Joint competition enforcement: Create a BRICS merger‑review college with shared case files, reciprocal leniency, coordinated remedies across digital platforms, energy and agribusiness, and enforce data portability/interoperability mandates to prevent gatekeeping and deter cross‑border cartels.
- Execution architecture: Establish a BRICS Data & Sustainability Council, fund technical assistance for regulators and issuers, and publish scorecards linking implementation to pricing outcomes (spreads, liquidity, index inclusion) to anchor accountability.
Concluding Remarks
As BRICS deepens cooperation and weighs further expansion, its role in the global economy is shifting from symbolic counterweight to a more operational network. The bloc’s growing share of output and trade, efforts to boost local-currency settlement, and the New Development Bank’s expanding mandate point to a broader bid to reshape financial flows and supply chains. Yet divergent national interests, uneven growth trajectories, and governance capacity remain material constraints.
What happens next will hinge on execution: whether members can align on admission criteria for new entrants, scale and de-risk project finance without eroding credit quality, build credible payment and clearing infrastructure, and coordinate positions in forums from the IMF and World Bank to the WTO. The response of private capital-through portfolio flows, investment decisions, and rating actions-will offer an early test of confidence. For commodity markets, multinationals, and emerging borrowers, the implications could be significant, from pricing power and standards to funding costs.
As leaders prepare for upcoming summits, the trajectory is clear but the pace is not. Whether BRICS can translate ambition into durable institutions and predictable policy will help determine how far the global economy moves toward a more multipolar order.