Develop or Else: BRICS Cooperation in International Finance

BRICS cooperation in finance is concentrated on three pivotal areas: reforming international financial institutions, boosting mutual investments—including sustainable ones—and establishing a framework for international settlements. The first area tends to be rather declarative as the BRICS nations have yet to reach a consensus on the quota formula for the International Monetary Fund (IMF) and the World Bank. Nevertheless, there is a shared acknowledgement of the need for regular reviews of quotas to reflect the evolving dynamics of the global economy. The Rio Declaration 2025 underscores this commitment, dedicating three paragraphs to the imperative of reforming the Bretton Woods institutions: one broad statement addressing the system as a whole, alongside specific points for both the IMF and the World Bank. 

 Active efforts are underway in the second area, particularly through the BRICS Business Council. Notable achievements include the establishment of the New Development Bank in 2014. However, challenges remain, such as the ongoing discussions about creating a BRICS rating agency, which have been in progress since 2015. A significant development is the Strategy for BRICS Economic Partnership, which expired this year and is set for renewal, with new document anticipated to incorporate the perspectives of newly joined member nations. Additionally, a BRICS investment platform was proposed last year. Paragraph 47 of this year's declaration highlights Russia's initiative to establish this platform, which could potentially incorporate BRICS Multilateral Guarantees. The latter was outlined in the Rio Declaration and is aimed at attracting private investment by mitigating project risks for investors. National and multilateral development banks frequently utilise this tool; for instance, as of the end of 2024, Russia's development bank, Vnesheconombank, had issued guarantees and sureties exceeding 1.6 trillion roubles. While the multilateral BRICS New Development Bank is positioned to formally offer guarantees for member countries' projects, this mechanism has yet to be utilised.

 In the third area, activities have gained significant momentum since 2022, although the notion of increasing settlements in national currencies has been present in joint statements and declarations since 2010. This topic emerged as a focal point during both the Russian Chairship last year and Brazilian leadership this year. Several key avenues of cooperation can be highlighted in this area: first, there is a concerted effort to enhance the role of the New Development Bank (NDB) in facilitating transactions in national currencies. This initiative is highlighted in the Rio de Janeiro Declaration, and indeed, from early 2024 to June 2025, the proportion of NDB loans issued in the national currencies of member states rose from 20.3% to 24.2%. The bank has set a target to elevate this share to 30% by the close of 2026.

 Another line of work is the approval of the BRICS Local Currency Bond Fund, which received support from all BRICS 5 nations back in 2017 and was highlighted in the Xiamen Declaration. Currently, however, progress remains limited, with no consensus reached on the fund's structure—specifically, how to allocate shares of each country's bonds within it. Nevertheless, establishing a fund composed of sovereign bonds from the BRICS nations could create a diversified financial instrument that offers attractive returns for both domestic and foreign investors. This mechanism could significantly boost transactions in local currencies, enhancing their liquidity, reducing volatility, and making them more appealing for international trade. Notably, this is likely to happen even if one country's bonds dominate the fund. It addition, the fund would facilitate simpler bilateral settlements without relying on intermediary currencies.

 The third line of work, which has thus far only been explored in discussions, pertains to the BRICS Cross-Border Payments Initiative. Last year, during the Russian Chairship, a report titled "Improvement of the International Monetary and Financial System" was unveiled, and in 2025, the working group on settlements delved into various aspects outlined in this report.  Specifically, preferences regarding cross-border payments among the BRICS nations were gathered through discussions with Central Bank Governors and documented in the Technical Report: BRICS Cross-Border Payments System.

 The fourth line of work, which has yet to find its way into the BRICS declarations, focuses on developing infrastructure for Central Bank Digital Currencies (CBDCs). At present, each of the BRICS nations is at a different point in their CBDC journey—ranging from South Africa and Ethiopia, which has merely announced its plans, to India and China, where pilot implementations are already in the retail phase. While digital currencies hold promise across various domains, their true potential shines particularly in context of the international settlements platform.

 To sum up, efforts are underway in all areas of financial cooperation, and while not every aspect has produced clear, visible results yet, the long-term vision for the international financial system among the BRICS nations is steadily coming into focus with each summit.

This text reflects the authors' personal opinion, which may not coincide with the position of the BRICS Expert Council-Russia