Beyond Bretton Woods: How BRICS/SCO Are Rewiring Global Finance
I. A New Financial Order in the Making
In the past few years, a series of high-profile meetings from Samarkand (September, 2022) to Tianjin (August-September, 2025) have signaled a concerted effort by major emerging economies to rewrite the rules of global finance.
Spearheaded by the BRICS (more correctly the BRICS+, following its expanded membership) and the Shanghai Cooperation Organization (SCO), these initiatives have a clear ambition. While it may not be overtly central to it, the aim of that ambition is to reduce dependence on the US dollar and Western-led institutions (principally, the IMF and the World Bank) that, together, gave the world a set of macroeconomic rules called the “Washington Consensus”.
Momentum, while slow enough to be largely ignored by the wider world, has markedly accelerated since 2022. To me this indicates an incipient break from the dollar-centric status quo that has prevailed since the collapse of the Bretton Woods system in 1971. While, of course, there is a chance that all this amounts to a damp squib in the end, there is also a potential real enough for this to become a seismic event in global monetary and macro history.
At the very least, it deserves careful attention.
Key developments fall into three broad categories: (a) settling trade in national currencies, (b) building alternative multilateral financial institutions, and (c) national strategies that are enabling this shift. This article will explore each in turn, then consider why these shifts are happening now and what they portend for the future of the global economic order.
A. Trading in National Currencies: The Push to De-Dollarize
Perhaps the trend most directly germane to western interests is the drive to conduct trade in local currencies instead of the US dollar.
At the September 2022 SCO Summit in Samarkand, member states approved a roadmap to increase the share of national currencies in mutual settlements. In practice, this means countries like China, Russia, India, and others agreed to use yuan, rubles, rupees, etc., for cross-border trade among themselves, reducing reliance on the dollar. Chinese President Xi Jinping explicitly urged implementation of this local-currency roadmap in Samarkand, reflecting a broad consensus in the SCO that a de facto “de-dollarization” was a strategic priority.
This push continued into 2023 and beyond. The BRICS member nations, some of which also have a full SCO membership or are affiliates, have likewise prioritized local currency trade. The Johannesburg II BRICS Summit Declaration (August 2023) stressed “the importance of encouraging the use of local currencies in international trade and financial transactions between BRICS”.
By mid-2024, BRICS foreign ministers jointly called for an “enhanced use of local currencies in trade and financial transactions among BRICS members,” noting that workstreams were launched in 2023. The communique noted that this trend was already on the upswing between 2017–2022, with a 56 percent increase in intra-BRICS trade during that period, though these figures alter somewhat based on how you choose to verify them.
Stating the obvious impetus behind this is perhaps redundant. Western sanctions on Russia after the Ukraine invasion turbocharged this trend, forcing Russia and its partners to find non-dollar arrangements.
Intra-BRICS trade reached over $600 billion by 2022.
Russia, with every sanction implemented by the West, dramatically reoriented its currency usage toward China’s yuan. In 2023, for the first time, the Chinese yuan surpassed the US dollar as the most traded currency on the Moscow Exchange. Yuan trades accounted for 42% of FX turnover, while the dollar’s share plummeted to under 40%. This was a direct result of Russia’s de-dollarization strategy under pressure: unable to use the currencies and financial infrastructure of unfriendly countries in the west, Russia increased settlements in yuan first, and then in other partner currencies like the UAE dirham and Indian rupee. China–Russia trade hit a record $240 billion in 2023 (up roughly 30%), with much of it conducted in yuan and rubles instead of dollars.
Other BRICS countries also began making increasingly strident moves in this direction.
Brazil’s President Lula has publicly advocated for developing alternatives to dollar dependence in trade. India and the UAE signed 2023 agreements to settle trade in rupees and dirhams and to link UPI with the UAE’s instant payments, part of an explicit push toward local-currency settlement and interoperable rails. More on this later.
Perhaps the cruelest of cuts to the petrodollar default was Saudi Arabia (a new BRICS invitee) signaling an openness to selling oil in non-dollar currencies. While an exploratory stance, not a formal shift, this is notable nonetheless.
It is worth emphasizing a key point. In spite of all the rumors that flew fast and loose, no single “BRICS currency” has been created. Perhaps there was some discussion of this among some members, but, publicly at least, even the thought of such an initiative has been diminished.
The focus instead remained on bilateral/local currency initiatives, the cumulative effect of which is a growing portion of inter-group trade being settled in national units.
To support this trend new cross-border payment systems are being developed.
At the BRICS summit under Russia’s 2024 chairmanship (Kazan, October 22–24, 2024), leaders endorsed continued work on cross-border payments and local-currency settlements. This was clearly articulated in the Kazan Declaration and in follow-on task-force language (often dubbed the BRICS Cross-Border Payments Initiative). “BRICS Pay” has been floated over several cycles as a branding for retail cross-border connectivity, and proposals for a “BRICS Clear”–type settlement architecture have been aired. These remain works-in-progress rather than operational replacements for SWIFT, but progress is being made.
Indeed, the SCO track has paralleled this. Samarkand (2022) adopted the national-currencies roadmap; subsequent meetings worked on linking members’ domestic rails (e.g., Russia’s SPFS and China’s CIPS) and studying settlement mechanisms.
From Samarkand’s SCO roadmap in 2022 to Tianjin’s 2025 SCO agenda, local-currency trade has been a consistent theme. And, crucially, countries are gradually overcoming their hesitations. Brazil’s 2025 BRICS presidency in Rio has continued to emphasize local-currency use in intra-BRICS trade, even as internal debates (chiefly in India) about yuan dominance persist.
The upshot is that trading in national currencies, once a fringe idea, is now mainstream policy for the BRICS/SCO bloc.
Yes, this trend of de-dollarization is gradual, but it is also clear: more trade within this emerging coalition is being settled in renminbi, rubles, rupees, reals and rands, and this is a significant step away from the post-Bretton Woods norm of dollar ubiquity.
B. Building Alternative Institutions: Banks and Funds Beyond the West
Parallel to trading in local currencies, the BRICS and SCO countries are constructing a new multilateral financial architecture. This initiative comes from a frustration with Western-centric institutions like the IMF and World Bank. Such institutions are seen as strongly pro-western in perspective in the Global South. It does not help that they have a poor batting record, with a difficult history of requiring the imposition of broadly unpopular austerity measures in the developing world over the years.
Regardless the reasons, the BRICS and SCO nations are establishing their own banks and funding mechanisms to serve their needs. In other words, they are essentially mimicking Bretton Woods institutions without the West at the center.
A cornerstone of this effort is the New Development Bank (NDB), often called, rather grandiosely, the “BRICS Bank.” It was founded in 2015 and headquartered in Shanghai, and was created by the BRICS specifically as a counterweight to the World Bank. It has since admitted new members (e.g., Egypt, Bangladesh, UAE, Uruguay) and has issued local-currency bonds (including in yuan, rand and ruble) to fund development lending. Key is the expectation that a stronger NDB will provide development finance without the policy strings often attached by the IMF/World Bank, thus giving the Global South more options.
Even more ambitious is the plan to create an alternative monetary fund. BRICS countries already have a $100 billion Contingent Reserve Arrangement (CRA), a pooled currency swap mechanism established in 2014 to provide emergency liquidity. This is, of course, strongly reminiscent of the IMF’s global role.
Newer proposals are emerging for a larger, more institutionalized fund. In 2025, as BRICS prepared for the Rio summit, there was talk of creating a “financial guarantee fund” backed by the NDB. Such a fund could potentially backstop members in balance-of-payments crises or during sanctions shocks, reducing their need to turn to the IMF. While details remain vague, the impulse is clear: build our own safety net.
Meanwhile, the Shanghai Cooperation Organization has launched its own development bank initiative. At the recent SCO Tianjin summit in August 2025, member states formally agreed to establish an SCO Development Bank. This new bank, championed by Beijing, is explicitly modeled after the BRICS’ NDB and China’s earlier success with the Asian Infrastructure Investment Bank (AIIB).
Its mandate will be to fund infrastructure and development projects across Eurasia, quite expressly a non-Western alternative to the World Bank and IMF. By prioritizing projects in Central and South Asia (under the sectoral undertakings of transport corridors, digital trade platforms, and energy security), the SCO Bank aligns with China’s Belt and Road vision and will channel capital outside traditional Western lenders.
Tellingly, the Tianjin Summit’s declaration underscored “financial self-reliance,” viewing the new bank as a pillar of a more multipolar financial order. In other words, countries of the SCO (which now include Iran and Belarus, among others) will have their own source of project finance, reducing their need to go to Washington or Brussels for funds.
Other institutional innovations are also underway, and I discuss them here to give a sense of the breadth of institutional reengineering and reimagining that is being attempted.
The BRICS in 2024 discussed setting up a BRICS commodities exchange (a “grain exchange”) to trade commodities like wheat, oil, and metals in their own markets. President Putin proposed this idea to encourage fair prices outside of Western-dominated commodity markets. Additionally, BRICS members are studying a joint reinsurance pool to facilitate insurance for trade and infrastructure projects among themselves. This would bypass Western insurers (who, as we have seen in recent times, withdraw coverage due to sanctions or political pressure) and protect against external interference in critical sectors. Even a BRICS joint depositary for securities settlement is under consideration, which could make it easier for investors in one member country to invest in another’s bonds or stocks without going through New York or London.
The point I would like to make here is not that most of these initiatives are likely to become resounding successes, but that these initiatives are not just talk. They are being incrementally implemented.
For example, the SCO Development Bank process is being launched in 2025, and BRICS’ NDB is already lending in local currencies (it has issued bonds in yuan, ruble, and rand).
The trajectory from Samarkand 2022 to Tianjin 2025 shows indubitable progression: Samarkand floated the idea of more financial cooperation; the 2023 SCO summit under India pushed for an “SCO Bank” and digital payments; the 2024 SCO meeting in Astana revived discussions on a Development Bank and even an SCO joint currency fund; and by Tianjin 2025, the bank is becoming reality.
In BRICS, similarly, early ideas of an alternative reserve currency mooted by Russia in 2022 gave way to practical steps in 2023–24 on enhancing the NDB and integrating payment systems, with 2025 poised for potentially deeper integration.
All this aside, it is worth noting that BRICS and SCO leaders still engage with existing institutions. They often call for IMF reform rather than outright abandonment. The Kazan Declaration, for instance, stressed the need to reform the IMF to give developing countries a greater voice.
But, crucially, these countries are no longer content to wait indefinitely for such reform. By creating parallel institutions, they gain leverage and a fallback option.
In sum, a new multilateral financial architecture is being born. One where Beijing, Moscow, New Delhi and others have a greater say, and where dollars and euro loans are no longer the only game in town.
C. National Strategies: Laying the Groundwork for Independence
Notably, the principal BRICS and SCO member nations are all following through with national strategies that are supportive of these multilateral initiatives and that serve to incrementally reduce their vulnerability to the existing Western-led system.
These include boosting gold reserves, developing indigenous financial infrastructure, and forging bilateral arrangements that bypass the dollar.
Perhaps the most telling trend is the surge in central bank gold purchases as shown in the table above. Gold, the ultimate reserve asset, has been accumulated at a record pace over the past few years , a clear hedge against dependence on the dollar.
In 2022, central banks worldwide, led by emerging economies, bought 1,082 tonnes of gold, followed by another 1,037 tonnes in 2023 and a record 1,180 tonnes in 2024. This three-year wave of buying is unprecedented in modern history, representing a very clear departure in the rate of increase from previous averages.
The result: As of mid-2025, global central banks hold more gold than at any time since 1996, and for the first time in decades their gold holdings outweigh their US Treasury holdings.
The BRICS nations have been at the forefront of this gold rush. Together, BRICS central banks now hold over 20% of the world’s official gold reserves. China’s over 2,200 tonnes and Russia’s hoard is over 2,300 tonnes, not counting unknown additional purchases that go undeclared since 2022). Thus, those two alone account for nearly three-fourths of BRICS gold reserves. In 2023, BRICS countries were the largest buyers of gold globally, with China alone adding 225 tonnes, its biggest one-year purchase in nearly 50 years. India and Turkey (a close BRICS partner) also made significant acquisitions. And, it is always worth pondering the fact that India holds the world’s largest household gold reserves, roughly 25,000 tonnes as of 2025, which significantly exceeds the combined gold holdings of the United States, Germany, Italy, France, and Russia.
The motivation is clear: give the move to diversify away from the dollar a very solid footing. Holding gold gives these countries a form of insurance and financial freedom. Gold in coffers cannot be sanctioned or frozen by a foreign government, and it provides confidence to back one’s own currency in turbulent times.
Another pillar of national strategy is building homegrown financial infrastructure that connects with partners. For instance, after being cut off from Western payment networks, Russia developed the Mir bank card system (a substitute for Visa/MasterCard) and expanded its SPFS interbank messaging (a SWIFT alternative) so that its banks could still communicate and process payments domestically and with friendly countries. Russia has since linked SPFS with other nations’ systems and lobbied BRICS partners to integrate with it.
China, for its part, has been internationalizing the yuan for years: establishing currency swap lines with dozens of countries, launching CIPS to clear yuan transactions globally, and even experimenting with the e-CNY digital currency which could one day be used for direct cross-border settlements without relying on SWIFT.
Perhaps alarmed by the GFC, India’s central bank, the RBI, in collaboration with the National Payments Corporation of India, rolled out its own Unified Payments Interface (UPI) in 2008. UPI can be thought of India’s own Visa/Mastercard/ACH network, all rolled into one, and so it was a natural building block for rolling out RuPay, which enables all domestic POS/em-commerce transactions and eliminates the need for any reliance on western networks. India connects this network internationally (e.g. connecting with systems in Singapore and the UAE, and with several other countries as well by way of an alliance with Japan’s JCB). And it is exploring a mutual-acceptance program with Russia’s Mir at present.
Such initiatives may seem technical, but collectively they form the plumbing of an alternative financial ecosystem. For example, if a Russian buyer wants to import machinery from India, the two can use linked national payment systems and settle in rubles/rupees via a swap line, thereby avoiding any dollar transaction or Western bank. These mechanisms were negligible a decade ago; today they’re steadily expanding.
A BRICS governments are striking bilateral agreements to enable non-dollar trade. As noted above, China has begun pricing some oil and gas deals in yuan, notably with Middle Eastern partners who have been steadfast users of the dollar. India has paid for Russian oil in currencies like the UAE dirham and even in rupees. Brazil and China reached a pact in early 2023 to conduct trade in each other’s currencies. Dozens of similar bilateral currency arrangements, often underpinned by central bank swap lines, form a patchwork that supports the broader de-dollarization agenda. Each individual deal is small, but together they indicate a systemic intent to reduce exposure to the dollar’s dominance.
Let’s run a thought experiment using the classic Erdos–Renyi connectivity threshold that tells you how quickly a set of isolated nodes on a graph become fully connected. In that model, you start with n isolated nodes and add m edges randomly, one at a time. The famous result is that when the number of edges is about (n/2)logn, the graph transitions from being mostly disconnected to being almost surely connected.
Apply this logic to the set of eleven BRICS member nations. With 11 countries, we have a total of 55 possible bilateral connections that can theoretically be made. Let’s begin the clock in February, 2022 and assume a sedate pace, say two countries making some form of bilateral arrangement only every four months. By October, 2026 you should expect half of all those possible bilateral connections to be complete. By 2030, 90% of all feasible connections are done. Indeed, progress is slow at first, then rather sudden.
Underpinning these moves is often a national security rationale. The 2022 freezing of Russia’s foreign exchange reserves (over $300 billion in dollar and euro assets) by Western sanctions was a watershed moment. It alerted countries like China that their dollar assets could be turned into liabilities overnight, if geopolitical tensions worsen. This risk, compounded by the latest tariff spat, has likely accelerated China’s diversification of its massive reserves. Even US-aligned countries in the Gulf and Asia have quietly shifted some reserves to gold or yuan, wary of being too exposed.
Finally, expanding membership in these blocs is itself a strategic move. The bigger the BRICS/SCO circle becomes, the more intra-group trade and finance can rely on their own frameworks. In 2023, BRICS invited six new members, including major economies like Saudi Arabia and Indonesia, to join in 2024, expanding the bloc’s GDP and commodity clout significantly.
Interest in BRICS exploded, with over 30 countries expressing desire to join. The appeal is partly economic. The expanded BRICS now accounts for 47% of global crude oil production and almost 40% of world GDP in purchasing power terms. But it is also financial.
Many in the Global South see BRICS as an emerging counterweight where their interests carry more weight.
A larger BRICS means more trade can be routed through currencies and banks of member countries rather than through New York or London. Likewise, the SCO added Iran as a full member in 2023 and integrated a dozen new partner countries by 2025, creating a 27-nation network that ranges from East Asia to the Middle East.
Through prudent reserve management, technological and financial innovation, and diplomatic outreach, BRICS/SCO members are steadily creating the conditions for a more autonomous economic zone.
These national steps are incremental and often underreported, but they form the foundation upon which high-level initiatives (like those from Samarkand, Kazan, Rio, Tianjin) can succeed.
The western-led global financial system and rules-based order isn’t being replaced overnight, but it no longer stands without an alternative. What we are witnessing is not a sudden revolution, but a steady repositioning of the world’s geopolitical and economic fulcrum.
II. Catalysts for Change: Sanctions and Trade Wars as a Perestroika Moment
Why has this break from the old order accelerated since 2022?
Two major geopolitical shocks from the West itself have acted as catalysts: the ostracism of Russia and Iran through sanctions, and the slapdash manner of the imposition of tariffs (often overtly called sanctions) under President Trump. These actions, aimed at punishing or pressuring individual countries, have instead had the unintended effect of galvanizing those countries and their partners to seek systemic alternatives — a bit of an economic Perestroika moment, where they decided to restructure how they engage with the world.
Russia’s experience has been particularly instructive. Following its 2014 annexation of Crimea, Moscow faced initial Western sanctions and began preparing for worse. It started reducing dollar assets, built its own payment network, and accumulated gold. But the full force hit in 2022 after the invasion of Ukraine: Western nations froze around $300 billion of Russia’s central bank reserves and severed major Russian banks from SWIFT. This was unprecedented. A G20 country’s foreign reserves rendered unusable overnight, a withdrawal en masse of foreign direct investment and a concerted effort to hamstring the economy in wave after wave of sanctions.
To Russia and other non-Western powers, this signaled that no reserves held in dollars or euros were truly safe if relations with the West soured. At the BRICS Summit in June of 2022, the related issues of countering the west’s “weaponization of the the dollar” and replicating its financial architecture were front and center. Countries like China openly fretted that they could be next in line should a conflict arise. The sanctions on Russia acted as a wake-up call: reliance on Western finance was a strategic risk. Not by coincidence, discussions of new BRICS payment systems and even a BRICS currency gained momentum after sanctions on Russia gathered pace.
In short, the economic isolation of Russia accelerated the birth of a parallel system as a self-defense mechanism.
The second shock came from the United States’ aggressive use of tariffs and economic threats, especially under former President Donald Trump. The first Trump administration (2017–2020) launched sweeping tariffs. A trade war with China, higher tariffs on steel and aluminum affecting India, Brazil and others, and frequent tariff threats as diplomatic leverage. This unilateral weaponization of trade ties alienated many countries, including US partners. For the BRICS nations, Trump’s approach confirmed that the US was willing to use its economic power coercively even against large emerging economies. Trump 1.0 attacked India’s and China’s trade practices, removed India’s preferential market access, and threatened Brazil over steel and other issues. These moves pushed the BRICS to close ranks and seek South-South cooperation as a counterweight.
Even after leaving office, Trump’s specter loomed. Notably, by late 2024, Trump publicly warned the BRICS nations against creating a new currency.
It’s hard to argue that such rhetoric isn’t extraordinary: essentially threatening economic war because a group of countries talked about financial cooperation.
The signal to the BRICS was clear. Instead of scaring them straight, Trump’s stance likely reinforced their belief that the US will not hesitate to use its dominance punitively.
This has echoes of Cold War “brinkmanship,” but in the economic realm. Call it a game-theoretic signal: if you even think of defecting from the dollar system, expect punishment.
For the BRICS and their expanding circle, these experiences have served to justify a more urgent “breakaway” strategy — much like how Perestroika in the USSR was a response to an unsustainable status quo, the current crop of leaders see the US-led order as increasingly unsustainable or hostile for them. It’s telling that their initiatives since 2022 have been bolder and more concrete than before.
The urgency injected by sanctions and tariffs compressed what might have been a decade-long gradual process into just a few years. Ironically, policies meant to isolate or discipline have instead given birth to a more cohesive counter-bloc.
None of this is to say the BRICS and SCO efforts are purely reactive. There are long-term structural forces and bold national initiatives that undergird the dynamic. The rise of China to the rank of a global superpowers and Russia’s return to it, the growth of India, the broad desire for multipolarity, a long-simmering resentment among several former colonies in the Global South against a western-led global order, the digital revolution in finance. These factors doubtless propelled changes by the organizations they are now leading.
The catalytic role of Western actions cannot be minimized. The clear acceleration of initiatives after Samarkand 2022 and the defensive tone regarding tariffs in 2025 illustrate that a more confrontational West simply accelerates the East’s search for alternatives.
In a very real sense, Washington and Brussels have provided the common external threat that has knit together a diverse set of countries with sometimes divergent interests (e.g. India and China, or Iran and Saudi Arabia) into exploring a common cause.
Shared wariness of Western dominance has become a glue.
III. The Road Ahead: Rivalry or Reconciliation?
What happens next?
Two broad scenarios suggest themselves. One is of a growing division and parallel systems, and another, increasingly seeming like a pipe dream, is of a more conciliatory adjustment by the West to accommodate these rising powers. The ultimate outcome will depend on how both sides play their hands in this grand geopolitical realignment.
Scenario 1: Further Fracture and East–West Rivalry
If tensions between the BRICS/SCO bloc and the Western powers continue or worsen, with yet more sanctions, trade wars, or even conflict, we are likely headed toward a more bifurcated global financial system.
In this scenario, the initiatives described above harden into a full-fledged parallel architecture. We could see, for example, the new SCO Development Bank and an expanded NDB financing most infrastructure in Eurasia and Africa, while Western lenders focus elsewhere, essentially creating spheres of influence in development finance.
Trade might increasingly be conducted in two blocs: one where the dollar/euro still dominate, and another where yuan, rupee, ruble and others are preferred. The “BRICS Pay” network could link dozens of countries on one side, while the West operates its own digital payment networks. SWIFT might coexist with a BRICS/SCO messaging system, each handling their respective users, with a limited set of countries that wish to and are permitted to straddle both architectures. In extreme form, separate internet backbones or digital currency standards could emerge, echoing the broader tech decoupling trend we are witnessing now with AI.
In this scenario, the global economy experiences a financial de-globalization, with money, credit, and investment flows partitioned by geopolitical alignment.
Such a fracturing would have profound implications. On one hand, countries in the BRICS/SCO orbit would gain greater autonomy from Western pressure; they could trade, borrow, and invest without constant fear of sanctions or dollar shortages. The dollar’s global share would likely decline over time, as more reserve composition shifts to gold and other currencies.
Yet, on the other hand, costs could include inefficiencies and instability: fragmented markets are less liquid and more volatile, and maintaining parallel systems is expensive. The East would discover the depth of sophistication that western financial markets and infrastructure have developed by virtue of an enormous first-mover advantage and decades of innovation. Replicating it is entirely possible, but won’t be cheap or easy.
Nonetheless, many in the BRICS camp seem willing to accept those costs for the sovereignty and security benefits of reducing Western dominance. If Western policies remain hostile or inflexible, this scenario of rivalry and decoupling could become a self-fulfilling prophecy.
Scenario 2: Western Conciliation and a New Integration
A very different path would involve Western powers recognizing the concerns of the emerging bloc, and making accommodative moves to integrate them into a reformed global system. A move that is meant to essentially co-opt rather than confront.
At the very least, this scenario would require serious reforms at the IMF and World Bank: giving China, India, and other major emerging economies a quota share and voting power commensurate with their economic weights, and possibly loosening the stringent conditions on lending.
Moreover, this scenario requires the US and Europe to act in a manner antithetical to recent form. They would need to credibly refrain from aggressive financial sanctions except in the most universal cases (e.g. UN-approved actions) and to rebuild trust that reserves won’t be arbitrarily frozen without similar global assent. Additionally, the West could engage with BRICS initiatives rather than oppose them, for instance, co-financing projects with the NDB or AIIB, or even allowing these institutions to plug into the existing financial network as partners rather than competitors.
In trade, a conciliatory approach might mean rolling back unilateral tariffs and instead negotiating new trade frameworks that include the concerns of large developing economies. It could, of course, also involve seeking mutually agreeable solutions to issues stemming from immigration and deindustrialization in developed countries.
That said, this scenario currently appears less likely. Trust has eroded on both sides. Western domestic politics are not very favorable to concessions. If anything, there’s bipartisan consensus in Washington to get tougher on China and Russia, not to mention skepticism of international institutions and a rising wave of concern about immigration patterns. On the BRICS side, the momentum and rhetoric have built up a certain inevitability to their projects; reversing course would require a lot of political will and proof of Western good faith.
Optimistically, we may instead get a middle state: partial accommodation. For instance, the IMF might implement some quota reform and the US might avoid the most extreme tariff threats, slowing the divergence but not stopping it entirely. This could lead to a kind of hybrid equilibrium where the dollar remains dominant but continues to gradually lose share, and where alternative institutions exist but play a supplemental role alongside the IMF/World Bank rather than a wholly rival role. In other words, a slower rupture but an eventual rupture nonetheless.
Game-theoretically, one might see this as a multi-player coordination problem. If the West and emerging powers can coordinate on reforms (a cooperative equilibrium), the global system remains integrated though more multipolar. If they mis-coordinate or pursue narrow self-interest (a non-cooperative path), the outcome is bifurcation.
Conclusion
The message coming from BRICS/SCO is gaining more than a modicum of consistency since 2022. A significant portion of the world is charting a new course in trade and finance. What we are witnessing is the early phase of a potentially historic transition. Away from the West-centered monetary order that has prevailed for more than 50 years, and towards a more decentralized or bifurcated order. Sovereign gold accumulation, the rise of local currencies in trade, new development banks, and widening alliances all signal this incipient break with the past.
Yet, it’s important to avoid hyperbole: the dollar is not about to be overthrown overnight, nor are the IMF and World Bank disappearing any time soon. The networks and inertia supporting the existing system are deep. However, trends that once seemed irreversible are no longer taken for granted. The year 2022 may be remembered as a inflection point — when the unprecedented isolation of a G20 economy and the specter of great-power economic war prompted a swift rethinking across the Global South. Since then, the tempo of institutional innovation and cooperation among emerging economies has clearly accelerated, after many years of slow progress.
For a broad, literate observer of geopolitics and macroeconomics, these developments are worth close attention. They represent a form of financial diplomacy and statecraft that could reshape how value is stored, moved, and lent globally. In the coming decade, we will likely see dual-use financial systems emerge: countries able to trade in dollars or in alternative currencies depending on circumstance. We will also see competition — perhaps healthy in some ways — between institutions: a country in distress might have both the IMF and an Asian or BRICS fund to turn to, and can choose the better deal. Such competition could even spur the incumbents to reform.
In the most optimistic vision, the end state could be a more balanced international system where no single country or bloc can “veto” others’ development. In the more pessimistic vision, we could stumble into a divided world economy, with all the inefficiencies and risks that entails. The game is still unfolding and History is on the move.
-Prateek
