From SWIFT to BRICS: America’s bid to Save The Dollar Hegemony

Recently U.S. Senator Lindsey Graham has expressed strong support for President Donald Trump’s accelerated economic deadline targeting Russia. Originally, Trump had threatened to impose a sweeping 100% tariff on Russia and its allies if hostilities in Ukraine didn’t end within 50 days. That window has now been slashed to a mere 10 to 12 days as of July 30, 2025. U.S. Treasury Secretary Scott Bessent has already issued warnings to Chinese officials in Stockholm, urging them to distance themselves from Russian energy. In response, China stood firm, declaring it would protect its economic sovereignty and secure its energy supplies with Russia for whatever be the costs. With rare earth minerals as critical leverage, Beijing has signalled it won’t bow easily. Trump’s threats have also extended to India, raising the possibility of more add-on tariffs on both India and China as early as August 2025 in addition to 25% & 30% respectively. This approach shows Trump’s intent to wield tariffs like a sledge hammer with his broader aim being to fracture the BRICS alliance and isolate Russia diplomatically and economically.

At the core of Trump’s pressure campaign is an attempt to derail the BRICS-led financial settlement mechanism that is currently in its pilot phase. This mechanism, based on the mBridge platform, poses a serious challenge to the U.S.-dominated global payments infrastructure. Launched in 2021 under the aegis of the Bank for International Settlements (BIS), mBridge was conceived to test the application of distributed ledger technologies (DLTs) such as blockchain in improving cross-border financial transactions. The initiative brought together central banks from China, Hong Kong, Thailand, and the UAE, later joined by Saudi Arabia, with BIS serving as the facilitator. Later on nearly 31 countries joined this pilot project with including India’s RBI.

However, geopolitical frictions altered the project’s trajectory. Following the October 2024 IMF meetings, BIS general manager Agustín Carstens publicly declared that the institution could no longer participate in projects involving sanctioned countries. This statement effectively marked BIS’s withdrawal from mBridge, driven by concerns about reputational and compliance risks. Yet, the exit of BIS did not halt mBridge it simply transferred operational control to the central banks involved with China and other countries leading the charge. This development showcased the robustness of decentralized ledger systems, which remain resilient even when traditional institutions withdraw support.

BRICS nations, in particular, have taken mBridge’s insights and begun tailoring their own cross-border settlement solution, dubbed as BRICS Clear. Rather than establishing a single digital currency or monetary union, BRICS Clear aims to facilitate trade in national currencies, minimize dollar dependence, and manage liquidity through a consensus-driven framework. Under Brazil’s chairmanship in 2025, the July BRICS summit in Rio welcomed a technical report from the BRICS Payments Task Force. This report, though not yet public, is understood to have outlined proposals to enhance interoperability between member countries' financial systems, using blockchain technologies and regional clearing mechanisms. Significantly, infrastructure for BRICS Pay a prototype payment card was tested during the 2024 Khazan Summit in Russia. Delegates at the Khazan BRICS summit in 2024 were able to top up and transact with the card, marking a real-world trial of an alternative payment mechanism. At the same summit, the BRICS Bridge system was formally discussed, with the BRICS Development Bank being tasked to design solutions around it.

It's important to state here that BRICS is not pursuing a euro-style monetary union or a shared digital currency an endeavour that would require immense harmonization of monetary policy, central bank alignment, and political consensus. Instead, the focus is on establishing a neutral, blockchain-based settlement unit to facilitate bilateral and multilateral trade in existing national currencies. The problem they seek to resolve is practical: when two countries engage in trade and use local currencies, the exporting nation accumulates foreign currency reserves it might not easily use or exchange. The proposed BRICS settlement platform would serve as a multilateral ledger for resolving such imbalances using central bank digital currencies (CBDCs), effectively offering a new global alternative to the SWIFT payment network.

If BRICS succeeds in building a peer-to-peer digital clearing system, demand for U.S. dollars in international trade could see a significant decline. On the flip side, interest in gold is likely to surge. This trend has already been visible, with BRICS countries central banks consistently increasing their gold holdings while reducing exposure to U.S. Treasury assets. Since March 2024, gold has repeatedly touched new record highs, reflecting a shift in reserves strategy. There is growing speculation that the BRICS digital unit whether derived from mBridge architecture or developed independently may be anchored to a dual reserve system comprising 40% gold and 60% BRICS national currencies. This hybrid model, while still under speculation causes extreme anxiety to the United States who see this as the alliance’s strategic pivot away from the dollar-dominated financial order.

At this moment the BRICS countries have categorically said that is not an effort to dethrone dollar as reserve currency or launch a new currency gold backed digital currency. What is in work is a BRICS mBridge based platform called BRICS Clear as payment settlement system aiming for intra-countries trade settlement on multiple national currencies just like SWIFT or China’s CIPS. This would be like a Digital Currency Unit on a blockchain based digital ledger technology. This will make intra BRICS trade immune to US sanctions & SWIFT suspensions.

Even though this is not a digital reserve currency but a payment settlement system the US views it with utmost suspicion. That is why Donald Trump is threatening additional tariffs on India & China as penalty for being part of BRICS. He views this BRICS payment settlement system of bypassing the Dollar as a tool to blunt US hegemony & financial might. The mBridge project, and subsequently BRICS Clear, represent a move towards currency multipolarity, where countries can settle trades without the dollar, potentially undermining its status as the primary reserve currency.

The USA's concerns are heightened by the geopolitical implications, with portrayal of mBridge in certain sections as a tool to undermine the dollar. The BRICS initiative, by fostering an alternative financial architecture that supports real economy exchanges and reduces vulnerability to US sanctions, poses a significant challenge to the existing dollar-centric system, prompting the USA to view it as a threat to its economic and geopolitical influence. The BRICS countries altogether control 33.9% of Earth’s area, 24.5% of Export Volume, 36.7% of Global GDP (PPP), 45.2% of the population with 39.3% of Industrial production and 44.7% of global wheat production. In addition China controls 44 million tonnes of Rare Earth oxides (controls major REE processing of about 65-70%), Brazil has 21 Million Tonnes of rare earths, India at No. 3 has 6.9 million tonnes of rare earths, Russia 3.8 million tonnes and South Africa 0.9 million tonnes making BRICS a formidable bloc with Russia holding trillions of dollars of minerals untapped in vast land of Siberia. While US has just 1.9 million tonnes and Australia 5.7 million tonnes of REE reserves. With all the energy, resources & technology Russia, China and India are formidable players with abundance in resource rich geography.

The American establishment is trying to reshore and re-industrialise its economy with a set blueprint in mind that is under execution. Firstly, the American establishment is trying to re-shore & re-industrialise itself using tariffs as a tool to threaten industries in critical sectors like Pharma, Steel & Aluminium, Semi-Conductors etc to move back to mainland USA; Secondly America wants to inflate its way out of Debt and that can only happen if Federal Reserve cuts interest rates & they are artificially supressed for a long time leading to asset bubble inflation that erodes the value of debt to GDP; Thirdly, US has started the audit of gold at fort knox and is importing the gold from London and elsewhere with an aim to revalue the same, filling the Treasury General Account with surplus that would mean devaluing the dollar; Fourthly issue a 50 year US Treasury bond backed by gold post revaluation to treaty allies and partners once redeemable on maturity and not tradeable, that could finance the US trillions of dollars of money at low interest rates to re-shore and re-build itself.

Finally in addition to above strategies, the Americans plan to unleash use the StableCoins backed by USD/UST 1:1 peg and circulate them at lowest level of retail trade making the common mode of retail, wholesale & cross border trade settlements underwriting the demand of US Short term debt. This could keep the interest rates supressed for longer duration leading to increased dollar circulation in trade settlements which could counter eCNY & CIPS of China or any other alternative payment settlement system in the world like the one mooted by BRICS. The access to American capital, technology and even consumers would be strictly guarded with terms & conditions like countries agreeing to trade with America would underwrite American debt, Dollar hegemony and pay tributes to Techno-Libertarian czars who wants to impose their trans-humanism utopia on the world.

While many legs of this strategy are under implementation like tariffs, the Federal Reserve Chair Jerome Powell has not been co-operative with the White House plan in reducing rates citing rising inflation due to Trump Tariffs. In addition to that America needs co-operation of Russia, China, India, Japan & European Union as big trading blocks to agree to a consensus. While Donald Trump was able to use threats of American security umbrella to get treaty allies like Japan & European Union to sign on the surrender pacts in trade but countries like Russia, China & India are holding out as these countries do not depend upon American security guarantees and have robust economy, resources and military power which is not easy for US to take down. Donald Trump tried to implement Kissinger reverse doctrine in a bid to co-opt Russia and break the Sino-Russian alliance but Vladimir Putin saw through the designs and refused to be part of this play.

Similarly, India while agreeing to trade with USA on most terms barring few non trade barriers, continues to be part of BRICS, settle cross border trade in non-dollar terms with Russia and even Iran. India’s strategic need of Russian energy and weapons reduces American leverage to get Russia to a ceasefire in Ukraine. In this way US sees India & China as main protagonists who in guise of strategic autonomy & sovereignty are bank rolling Russia’s war machine as well as being part of this BRICS mBridge initiative. Even though Russia sanctions act has not passed in US Congress yet President Trump plans go to unilateral on this. He has set a 10 days timeline for Russia to cease conflict in Ukraine on expiry of which we could see US Treasury impose sanctions on Russian energy Oil/Gas & Uranium. And even place secondary sanctions/tariffs of 10% on India & China who are two biggest importers of Russian Oil/energy. India’s reported refusal for taking American F-35 jets & likely bent towards SU-57 Russian stealth jets, S-400 missile systems is further irking the US MIC.

In addition, even the Monroe doctrine in America’s is failing as Canada is not agreeing to a deal with US and Brazil in South America under President Lula is rebelling against American hegemony while cutting deals with China & India on rare earths etc. Even though the Americans have a plan or a blueprint in mind yet it is facing multiple pushbacks from various countries who are not treaty allies or vassal states. The whole effort of USA is to break apart BRICS & then later SCO. This is what is leading to President Trump’s frustration and outburst on India’s ties with Russia, China’s energy ties with Russia & the alleged BRICS affrontment to US Dollar.

Ironically, among the BRICS countries India is the only country which is part of QUAD, Mineral Security Partnership & even foundational defence pacts with United States. However United States sees India’s tactical reset with China on border and trade in recent months as a jolt to its Indo-Pacific strategy of containment of China. India in its national interests sought a détente with China through Moscow’s good offices which made the PLA pull back from Eastern Ladakh ending 4 years long standoff between two sides since April 2020. This sudden détente between India & China opened up space between two countries to resume trade and bi-lateral ties which undercut the American interests in the region. This is where America started pivoting towards Pakistan as a tool to pin down India in the region.

However, Americans are hypocritical as it was them who used the activists, department of justice to target Indian corporates and even name Indian intelligence officials in the Nikhil Gupta case. It is Americans who extolled and backed the coup to unseat Sheikh Hasina in Dhaka in August 2024 who was seen as pro India. She was replaced by Noble laureate Mohammad Yunus who is known Clinton protégé & someone who has deep ties in Washington DC establishment. The American double cross of India during Pahalgam attack in April 2025, the Crypto Deal with Pakistan, General Munir’s lunch-on with President Trump and CENTCOM General Kurilla praise of Pakistan as an ally has further strained the Indo-US Strategic Partnership. The Indo-US partnership which was built with bi-partisan consensus over 25 years since 1998 Nuclear Test is now facing its litmus test.

What we are witnessing today is an empire that is deeply indebted in debt, de-industrialised now facing pushback by rising powers in Eurasia & Indo-Pacific. Any empire on decline tries everything to stem its decline, it will use all tools in its armour to retain its hegemony, its reserve currency for whatever be the costs. The acceptance that American empire is in its twilight zone wont come easy more so since the world has pivoted away from unipolarity to multi-polarity. Thus India in its true sense as sovereign power-seeking multi-polarity must brace itself for the chaos that is about to be unleashed by United States of America globally. Hard choices will have to be made by Indian establishment but what America doesn’t realise is that by threatening large economies of the world won’t get you the submission they deeply so desire.

Rather India could have acted as a bridge between West and the East but Trump’s unilateralism & pivot to Pakistan might end up making Russia-India-China troika a reality. Whatever said & done, India must be careful in making choices because Great Powers tend to barter their sphere of influence just like what happened in Yalta conference. It could be another Yalta 2.0, where Russia, China & America could agree to such an agreement while cutting India out of it. Thus, India must not react harshly to Trump diatribes and provocations, keeping calm and negotiate while keeping its national interests in tact without getting trapped into this bloc politics. We have read how Winston Churchill felt when British were asked by FDR in Atlantic Charter, 1941 to give up its empire in return for American help in war effort. Ultimately Winston Churchill leading an indebted British Empire and debased Pound sterling had to agree to sign the death warrants of British Empire. The American establishment understands this bargain and is taking all measures to avoid going that road into a sunset. The world is witnessing a great reset and India just happens to be in middle of it.