The world of global finance is experiencing a major shift. With the launch of BRICS Pay, a new multicurrency payment system by the BRICS nations (Brazil, Russia, India, China, and South Africa), there is a clear attempt to challenge the dominance of the U.S. dollar in international transactions.

This development has significant implications for the existing financial order, which has long been centered around the U.S. dollar.

But how might the United States react to this bold move by BRICS?

What measures could it take to maintain the dollar’s supremacy and ensure its role in global finance?

In this article, we will explore the potential strategies the U.S. might use to counter BRICS Pay and the broader shift toward a multicurrency world. We will break down each potential response in detail, using simple terms to explain complex financial dynamics.

Understanding BRICS Pay: A Quick Overview

Before diving into the U.S. reaction, let’s briefly understand what BRICS Pay is and why it matters. We’ve covered this in detail which you can read here, although here is the summary.

BRICS Pay is a payment system introduced to facilitate transactions between BRICS nations using local currencies, bypassing the need for the U.S. dollar. It aims to provide a more decentralized and balanced financial system, allowing BRICS countries to trade directly using currencies like the Chinese yuan, Indian rupee, Russian ruble, and others.

Traditionally, global trade and financial reserves have relied heavily on the U.S. dollar. This gives the U.S. considerable influence in international markets. By creating an alternative system like BRICS Pay, BRICS countries aim to reduce dependency on the dollar, offering more autonomy and economic sovereignty, particularly to developing countries.

However, the U.S. will not sit idly by as its financial dominance is challenged. Here’s how it could react:

Diplomatic Engagement and Alliances

Everyone knows the diplomatic alliance and interference by the USA, but to some extent many countries have to maintain good relations with the US just because they are controlling the global currency.

Developing countries can’t afford to go against them because there will be the chances to destabilise their economy. Here are some possibilities, how US can react:

The U.S. has strong diplomatic ties worldwide, which it could use to maintain support for the dollar. It is likely to engage in active diplomacy, encouraging countries to continue using the dollar in trade and financial reserves.

The U.S. might strengthen existing alliances (e.g., G7, NATO, and EU partners) and forge new partnerships with countries not part of BRICS, offering economic incentives to keep using the dollar in transactions.

For example, the U.S. could promise favorable trade terms, development aid, or financial support to countries that opt for dollar-based trade, keeping them aligned with the existing financial system.

Economic Sanctions and Pressure

Have you ever thought why the US is only putting sanctions on the countries, why not India is putting sanctions on Pakistan as some serious threat to control the terrorism from their side?

Because India and their allies are not controlling the effective currency. In this scenario, India has to be careful, if the US puts sanctions on India. Because we all know the Pakistan – US relations.

In recent events we saw sanctions on Russia and in the past we’ve seen sanctions on Iraq and Vietnam as well. So, there is a pattern of sanctions. It’s in countries the US don’t like.

Let’s see how the US would react and try their best to keep the powers to themselves.

Historically, the U.S. has used sanctions as a tool to protect its interests and enforce international norms. In response to BRICS Pay, the U.S. might impose sanctions on entities or individuals involved in promoting or adopting the BRICS system, particularly if it perceives this shift as a direct threat to U.S. financial stability.

The U.S. could justify these sanctions by citing issues such as money laundering, terrorism financing, or lack of regulatory oversight within BRICS Pay’s financial architecture.

Sanctions would serve as a deterrent, making countries and businesses think twice before fully adopting BRICS Pay, as they may risk losing access to the U.S.-controlled financial systems and dollar-based markets.

Adjustments in Monetary Policy

I personally don’t think adjustments in the monetary policy will affect the BRICS pay or its plan or its launch. Because it’s not only about the currency and problems associated with it. This is also about the controllers.

World needs multi polarity in attitude and distributed power system, but these all for another article, here we’re discussing how US would react, so here are some ways, I think they can adjust their policy:

To keep the dollar attractive, the Federal Reserve might adjust its monetary policy. For example, it could manage interest rates to maintain the dollar’s competitiveness compared to other currencies, particularly those promoted by BRICS Pay.

By ensuring that dollar-based assets (like U.S. Treasury bonds) offer competitive returns, the U.S. could make the dollar more appealing for central banks and investors around the world. This would help keep the dollar as a preferred reserve currency, even amid the rise of BRICS alternatives.

Additionally, the U.S. might work on making dollar transactions faster and more efficient through technological innovations, retaining its appeal in global trade and finance.

Accelerating the Digital Dollar

As we’ve already discussed, it’s not only about the problems with the current system, its the controller. But US would have to do something, those something can be:

The U.S. has been exploring the idea of a Central Bank Digital Currency (CBDC), commonly known as the digital dollar. If BRICS Pay becomes widely adopted, the U.S. could speed up its plans for a digital dollar to compete directly with BRICS’ payment system.

A digital dollar could make transactions faster, cheaper, and more secure, offering similar benefits as BRICS Pay. By providing a modernized payment infrastructure, the U.S. could retain its influence in global transactions.

Moreover, a digital dollar could offer better oversight and compliance with financial regulations, making it a more trusted option for countries and businesses wary of BRICS Pay’s regulatory environment.

Enhancing Financial Markets

This sounds very lucrative, but as per the current economy of US and Europe things are hard to execute, but anyway we have to mention this in the discussion.

To maintain the dollar’s attractiveness, the U.S. could further deepen and diversify its financial markets. This would include creating new financial products, increasing liquidity, and offering more investment opportunities.

By making the U.S. financial market more competitive, the U.S. can ensure that global investors and central banks continue to see the dollar as a safe and profitable investment.

Additionally, the U.S. might work on strengthening institutions like SWIFT, the global payment network, which is currently dominated by dollar transactions. Enhancements in SWIFT’s speed, cost, and efficiency could counter the appeal of BRICS Pay.

New Trade Agreements and Economic Incentives

The U.S. could respond to BRICS Pay by negotiating new trade agreements that incentivize the use of the dollar in international transactions. These agreements might offer better trade terms or lower tariffs to countries that continue to use the dollar.

For instance, a trade agreement with a developing country could include clauses that encourage dollar-based settlements in exchange for access to U.S. markets or development aid.

This approach not only preserves the dollar’s role in global trade but also strengthens geopolitical ties, making it harder for countries to shift completely to BRICS-based systems.

I think this will be the first measure, which the US and its allies will go for. By doing this they can easily restrict the under developed or developing countries to use the BRICS pay, somewhat this sounds like a threat but the US has the history for it.

Public Campaigns to Undermine BRICS Pay

After a very long time we can see some global campaigns between 2 global organisations.

The U.S. might launch campaigns emphasizing potential risks associated with BRICS Pay, such as regulatory loopholes, lack of transparency, or increased state control, particularly by China.

Through global forums, media outlets, and financial institutions, the U.S. could highlight the perceived shortcomings of BRICS Pay, persuading countries and businesses to stay with the dollar-based system, which has been tested for decades.

Western financial institutions might also express skepticism about the stability and reliability of BRICS Pay, urging caution among global markets and central banks.

Leveraging Military and Strategic Relationships

The U.S. has strong military alliances, particularly in regions like the Asia-Pacific, Middle East, and Europe. These alliances could be leveraged to maintain support for the dollar-based financial system.

For example, countries that have strong defense ties with the U.S. might be less inclined to fully embrace BRICS Pay, fearing potential diplomatic or military repercussions.

By emphasizing security and geopolitical alliances, the U.S. could use strategic relationships to limit the influence of BRICS Pay in key regions.

Collaborating with the IMF and World Bank

The U.S. has significant influence in institutions like the International Monetary Fund (IMF) and the World Bank. It could use this influence to provide alternative financial support to countries considering BRICS Pay.

For instance, the IMF or World Bank could offer loans or development funds that are linked to dollar-based systems, making them more attractive than BRICS alternatives.

These institutions could also promote financial policies that favor the dollar, making it more challenging for countries to fully integrate with BRICS Pay without losing access to traditional international financing.

Promoting Economic Growth and Innovation

One of the strongest responses the U.S. can offer is a focus on maintaining a robust economy. A strong U.S. economy inherently strengthens the dollar’s position as the world’s reserve currency.

By promoting economic growth, innovation, and technological competitiveness, the U.S. can ensure that the dollar remains a reliable and attractive option for global trade and reserves.

Investment in research and development, education, and infrastructure would enhance the U.S.’s global competitiveness, making the dollar-backed economy more appealing compared to alternatives promoted by BRICS.

Conclusion: A New Financial Rivalry?

The introduction of BRICS Pay represents a major shift in the global financial order. It’s clear that BRICS nations aim to reduce reliance on the U.S. dollar, offering more balanced financial alternatives. However, the U.S. is unlikely to relinquish its dominance without a strategic response.

From diplomatic engagement to economic incentives, sanctions, and the development of a digital dollar, the U.S. has multiple tools at its disposal to counter the impact of BRICS Pay. While the transition toward a multicurrency world may not happen overnight, the U.S.’s efforts to maintain dollar hegemony will be multifaceted and determined.

Ultimately, the global financial system could become more multipolar, with multiple currencies playing significant roles. 

This would create a more balanced and resilient economy, benefiting developing countries and reducing the risks of a single-currency crisis.

However, achieving this vision will require overcoming geopolitical tensions, technical challenges, and regulatory barriers.

As BRICS and the U.S. continue to shape the future of global finance, it’s clear that the world is moving toward a new era—one where financial power is more evenly distributed and less reliant on a single currency.

Whether BRICS Pay can truly rival the dollar remains to be seen, but it has certainly set the stage for a major financial transformation.