An expanded BRICS is asserting new weight in the global order, leveraging its market size, resources and diplomatic reach to challenge Western-led institutions and norms from finance to energy. As the bloc broadens beyond its original five to include new members from the Middle East and Africa, coordinated moves to trade more in local currencies, deepen the New Development Bank’s role and align positions in multilateral forums are beginning to redraw lines of influence.
Together, the enlarged grouping now represents close to half the world’s population and a rising share of global output and oil supply-giving it leverage in setting agendas on development finance, supply chains and sanctions. The push, framed by leaders as a bid to amplify the Global South’s voice, also tests the durability of dollar dominance and post-Cold War economic governance. Yet internal rivalries and divergent strategic priorities could shape how far, and how fast, BRICS’ growing clout translates into lasting power.
Table of Contents
- BRICS expansion shifts trade and finance as local currency settlements and alternative payment systems gain traction
- Washington and Brussels urged to recalibrate strategy through critical minerals partnerships and deeper engagement with the New Development Bank
- Businesses and investors advised to diversify funding sources hedge sanctions exposure and localize supply chains across BRICS markets
- Concluding Remarks
BRICS expansion shifts trade and finance as local currency settlements and alternative payment systems gain traction
With new members broadening the bloc’s commodity and capital base, finance ministries and state lenders across member economies are accelerating local-currency settlement for energy, metals, and consumer-goods trade, narrowing exposure to dollar funding costs and sanctions risk. Cross-border rails are diversifying as China’s CIPS handles a larger share of renminbi clearing, Russia’s SPFS extends links with partner banks, and pilot schemes such as BRICS Pay explore retail and B2B use cases alongside regional systems like India’s UPI tie-ups. Central banks are building swap lines and testing interoperability for instant payments, while sovereign wealth funds weigh non-dollar invoicing in long-term supply contracts. The shift, still partial, is reshaping pricing power and liquidity flows: exporters gain hedging options in home currencies, importers reduce translation risk, and global banks recalibrate compliance and correspondent networks as settlement geography fragments.
- Trade invoicing: Rising yuan- and rupee-linked contracts in energy and agriculture; more bilateral netting to cut FX churn.
- Payment infrastructure: Expanded CIPS-SPFS connectivity and sandbox trials for cross-border instant payments.
- Reserves and funding: Incremental moves toward diversified reserve baskets; greater use of local-currency bonds.
- Risk dynamics: Lower dollar dependency but higher operational complexity and basis-risk management needs.
- Market impact: Tighter spreads for select EM issuers tied to local-currency trade flows; recalibration of bank compliance costs.
Washington and Brussels urged to recalibrate strategy through critical minerals partnerships and deeper engagement with the New Development Bank
With BRICS members expanding resource influence and the New Development Bank accelerating local-currency lending, transatlantic officials face mounting pressure to pivot from containment to pragmatic de-risking that secures inputs for the green transition while preventing supply shocks; analysts outline a tighter playbook that couples market access with standards and co-financing to stabilize prices, diversify away from single points of failure, and preserve Western rule-shaping leverage across emerging industrial hubs.
- Strike “minerals diplomacy” compacts with African, Latin American and Indo-Pacific producers that bundle long-term offtakes, price-stability clauses, and local beneficiation (processing and refining) commitments.
- Co-finance midstream capacity in partner countries via blended structures with the New Development Bank, EIB/EBRD and DFC, using partial guarantees, political-risk insurance and local-currency windows to crowd in private capital.
- Harmonize ESG and traceability standards (digital “battery passports,” methane and scope-3 disclosures) to align the EU Critical Raw Materials Act and U.S. IRA rules with producer-country frameworks, minimizing compliance friction.
- Deploy strategic stockpiles and swap lines for high-risk inputs-lithium, nickel, graphite, rare earths-backed by transparent release protocols to dampen volatility and deter export-control brinkmanship.
- Deepen NDB engagement through observer status, co-financed green corridors, joint technical assistance, and green-bond alignment, conditioned on procurement transparency, debt-sustainability safeguards and sanctions compliance.
Officials say the aim is not decoupling but recasting leverage: embedding Western standards in fast-growing value chains, anchoring resilient supply routes, and shaping the NDB’s project pipeline toward credible climate and governance benchmarks.
Businesses and investors advised to diversify funding sources hedge sanctions exposure and localize supply chains across BRICS markets
With the expanded bloc deepening financial linkages and testing alternatives to Western rails, risk advisers say corporates should pivot to multi-currency liquidity, sanctions-resilient financing, and in-market production to preserve continuity as compliance burdens rise and FX swings widen across key corridors.
- Diversify capital channels: Blend local-currency bonds, regional development bank lines, and trade finance from BRICS-based lenders; assess CIPS- and SPFS-enabled payment routes alongside traditional SWIFT pathways.
- Hedge geopolitical and regulatory risk: Expand counterparty screening, embed robust sanctions clauses, and use political risk insurance and credit guarantees; deploy NDFs and cross-currency swaps to manage rupee, yuan, and real exposures.
- Localize and dual-source: Build supplier redundancy inside multiple BRICS markets, shift final assembly onshore to capture rules-of-origin benefits, and create buffer inventory near ports and special economic zones.
- Operationalize compliance-first structures: Centralize KYC/AML, standardize documentation for letters of credit, and scenario-test logistics via alternative corridors to mitigate chokepoint disruptions.
Concluding Remarks
As BRICS broadens its economic reach and diplomatic ambitions, the question is less whether its influence is growing than how coherently it can translate that momentum into durable change. Divergent national interests, uneven growth trajectories and unsettled global markets will test the bloc’s ability to act in concert on financing, trade rules and standards. Yet its expanding toolkit-from the New Development Bank to local-currency settlement efforts-signals a sustained bid to shape the agenda beyond traditional Western-led institutions.
How the G20, IMF and multilateral lenders absorb or resist that pressure will help define the next phase of global governance. For emerging economies seeking greater voice on debt relief, infrastructure and climate finance, BRICS offers an alternative channel; for established powers, it poses a strategic challenge that demands adaptation rather than dismissal. The balance of outcomes will be measured not in rhetoric but in project pipelines, voting shares, supply-chain realignments and the currencies in which deals are done. In a system in flux, BRICS has ensured its seat at the table-and the contours of the table are beginning to shift.