Money, Institutions, Alliances — BRICS as a Network

In the previous part, we saw that BRICS is strong in commodities and demographics. But a network's strength does not come from what lies beneath the surface; it comes from the institutions that coordinate the flow. Or from their absence. After all, BRICS was never modelled on the EU: no common currency, no common parliament, no common army. So what makes it different? And is that difference a strength or a weakness?

The mainstream media habitually describes BRICS as if it were a stillborn EU project: "they have no common currency, no common bank, so they are not even an alliance." This argument, however, is self-defeating. BRICS did not try and fail to create a common currency; it chose not to. And in that choice lies a deeper economic logic that Western analysts routinely ignore.

The New Development Bank — Real Bank or Political Symbol?

In July 2015, the New Development Bank (NDB) opened its doors in Shanghai. Its founding had been agreed by BRICS members a year earlier, at the 2014 Fortaleza summit. The goal was clear: to provide infrastructure and sustainable development loans that the World Bank and regional development banks disburse too slowly, too bogged down in red tape, or too laden with political conditions. In 2024, the bank set a record: it approved $4.5 billion in new loans, double the previous year's total. Altogether, projects totalling $39 billion were approved across 120 separate investments.

But behind the figures sits a far more important trend. Of the 15 projects approved by the bank in 2024, 5 — roughly a third — were denominated not in dollars but in local currencies – yuan, rand, rupee – whereas across the cumulative portfolio this share remains only about 22%. This is more than a symbolic gesture: it means the BRICS countries are trying to turn their own currencies into international instruments without having to wait for a common BRICS currency. The bank holds credit ratings of AAA (Japan Credit Rating, JCR) and AA+ (S&P) – meaning investors regard it as nearly as creditworthy as the major Western multilateral institutions.

Yet the NDB's operations contain a glaring paradox that BRICS propaganda never mentions. The bank finances a significant share of its projects by issuing dollar-denominated bonds on international capital markets, Wall Street included. When Western sanctions hit Russia after 2022, the NDB – BRICS's own bank – was forced to suspend financing for Russian projects to avoid endangering the confidence of its Western investors and its credit rating. In other words, even their own institutions cannot break out of the dollar's web without their funding collapsing.

The Contingent Reserve Arrangement — An Emergency Fund That Was Never Used

The NDB is the "proactive" face of BRICS finance; the Contingent Reserve Arrangement (CRA) is the "emergency reserve." It is a $100 billion facility that could be tapped if a member country faced a balance-of-payments crisis and could not finance its imports. The plan sounds appealing, but there is a massive practical problem: since launching in 2016, it has never once been activated.

The catch lies in the terms. Access to 70% of the facility – $70 billion – requires an IMF programme. This means that if a BRICS member lands in serious trouble, it is not its own alliance that bails it out; it must turn back to the very body it was trying to distance itself from. Moreover, none of the newly joined members – Egypt, Ethiopia, Iran, the United Arab Emirates, Indonesia and (from mid-2025) Saudi Arabia – have joined the financial arrangement. The CRA, then, is more a diplomatic gesture than a functioning insurance mechanism.

The Common Currency Dream — Why the Idea Is Dead

At the 2025 Rio summit, the media once again stoked fears that BRICS would unveil its "gold-backed common currency." It never materialised. But why not? The answer is not technical; it is political and economic. India's commerce minister, Piyush Goyal, put it bluntly: "Imagine we had a common currency with China. Impossible." The tension between the two countries – border disputes, trade rivalry, geopolitical antagonism – simply makes it impossible for a single central bank to set monetary policy for both economies.

But there is also a deeper, theoretical reason. As the work of Ludwig von Mises and Friedrich Hayek has long shown, a common currency can only work if economic structures, productivity levels and fiscal cultures are similar. The eurozone crises (the Greek collapse of the 2010s, followed by the Italian debt spiral) showed precisely what happens when a common currency is forced on different economic cultures. The gulf among BRICS members – China's centrally planned economy, India's freer markets, Russia's sanctions-hit economy, Brazil's cyclical crises – is far wider than any common currency could sustain. A BRICS single currency would be suicidal — not merely politically, but economically.

The Bitcoin Myth — Sanctions Evasion or Freedom?

A "rumour" has been circulating on the internet that BRICS countries are using Bitcoin as a third, independent settlement tool: they are trying to move away from the dollar, yet they do not want to hold each other's endlessly printed currencies either. The reality is far more nuanced – and far less romantic.

BRICS as an organisation has never taken a position in favour of Bitcoin, and it has no common cryptocurrency strategy. Only Russia has made moves: from July 2025, it placed Bitcoin and certain stablecoins (such as Tether) on a legal footing for international trade. But this is not a market choice; it is a matter of necessity. Russian banks, locked out of the SWIFT messaging network, and their sanctions-wary partners needed some channel to move money. Russian cryptocurrency turnover reached 1 trillion rubles (roughly $11–12.7 billion), and according to Reuters sources, a single trader's transactions alone amount to "ten million dollars a month." Yet the mechanism is not direct Bitcoin settlement: the Chinese buyer pays in yuan to an offshore intermediary, which converts it to cryptocurrency and then into rubles inside Russia. Here Bitcoin is merely a conduit, not a reserve currency.

The other BRICS members are not following this route for commercial settlement. Since 2021, China has completely banned Bitcoin for commercial use and is pushing its own digital yuan (e-CNY). India does not accept Bitcoin either; it is developing its own digital rupee. Brazil has a crypto-regulatory framework, but it does not use it for state-level trade settlement. BRICS, then, is not moving toward Bitcoin; it is moving toward central bank digital currencies (CBDCs) and bilateral local-currency settlements. The "Bitcoin-BRICS" narrative is simply false.

Network or Union? — BRICS and the EU as Two Models

BRICS is most often compared to the EU. But the parallel is misleading. The EU is a union: common legislature, common court, common currency, free movement, common trade policy. BRICS is a network: no common central bank, no common parliament, no mandatory legal harmonisation. Members decide independently and coordinate only when it suits everyone.

This difference is not a weakness; it is a different kind of logic altogether. The EU follows the "deep integration" model: the more areas covered by common rules, the stronger the bloc. BRICS follows the "loose network" model: the fewer obligations, the more members can join without surrendering sovereignty. The EU has 27 members, but enlargement has slowed because every new member must meet serious legal and economic conditions. By 2025, BRICS has 11 full members and 10 partners, and the accession threshold is far lower. That allows for rapid growth, but it also means weaker ties.

The Money of the Future — CBDCs and Digital Sovereignty

If there is no common BRICS currency and no Bitcoin, then what? The answer: central bank digital currencies (CBDCs) and bilateral networks. Since 2020, China has been testing the digital yuan (e-CNY), India the digital rupee (e-Rupee), and Brazil the Drex. These are not cryptocurrencies; they are digital forms of conventional money, issued and controlled by central banks.

But the logic behind CBDCs is not necessarily one of "freedom." While Bitcoin stands for decentralisation, the CBDC – especially the digital yuan – could become the perfect tool of state control. This is programmable money: the central bank can see precisely who buys what and where – down to the second; money can "expire"; and the accounts of certain groups can even be frozen. This is not an alternative to Western financial liberty; it is the most advanced surveillance network of digital state capitalism.

A pilot project called BRICSBridge carried out 40 successful transactions in the first quarter of 2025, combining CBDCs and decentralised finance (DeFi) technologies. But the real breakthrough is the mBridge project, which had processed over $55 billion in trade settlements across more than 4,000 transactions by the end of 2025 – a 2,500-fold increase on the 2022 pilot phase. Crucially, the Bank for International Settlements (BIS), which had coordinated the project for four years, officially exited mBridge in October 2024, stating that it was not a "BRICS platform" and not a sanctions-evasion tool. Coordination has since been entirely in the hands of the participating central banks (PBoC, HKMA, Bank of Thailand, CBUAE, SAMA). And here comes the twist: within mBridge, the digital yuan accounts for more than 95% of total settlement volume. The other participants – Hong Kong, Thailand, the United Arab Emirates, Saudi Arabia – have effectively become users of Chinese digital infrastructure.

This is precisely what India fears. Piyush Goyal's "impossible" statement was aimed not only at a common currency but also at this hidden "yuanisation." De-dollarisation in practice is not evenly distributed: countries that join mBridge are quietly swapping dollar dependency for dependence on Beijing. The project does not aim to replace the dollar directly; it aims to build a parallel, redundant system – but in that system, China is the dominant node.

What Does the Future Hold?

BRICS's institutions, then, are not weak imitations of the EU; they run on a different logic. The NDB works and grows, but it still functions within the dollar system. The CRA is a paper tiger. A common currency is impossible, but bilateral use of local currencies is spreading. Bitcoin is not a BRICS strategy; it is Russian sanctions evasion. And the money of the future is not a common gold-backed currency; it is a network of central bank digital currencies – one in which China currently holds a commanding lead.

BRICS's strength lies not in its central institutions but in the fact that members can cooperate without surrendering monetary sovereignty. This is slower, more complicated and less spectacular than announcing a common currency. That makes it more sustainable – unless one node of the network grows so large that the others are reduced to mere satellites orbiting it. In the next part, we will look at how this network might evolve by 2035, 2045 and 2055 – and what scenarios could lead to success or disintegration.