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Written by: Bojan Pravica, founder of Elementum

How countries are building alternative settlement paths – not to tear down the existing system, but to reduce dependence on a single center
When discussions touch upon alternatives to the global financial system, dramatic terms quickly emerge: the end of the dollar, a new world currency, the collapse of the existing order. But the reality is significantly less spectacular – and at the same time, far more important.
Countries that have become more cautious over the last decade regarding the political neutrality of existing financial infrastructure have not opted for revolution. They have opted for adaptation. Instead of trying to replace one system with another, they are building parallel paths that allow for operation even in circumstances where access to the dominant system is limited or conditional.
In this context, terms like BRICS, CIPS, regional settlements, and bilateral agreements gain significance. Not as a substitute for the West, but as insurance against unilateral dependence.

Why payment infrastructure is the true power

Currencies alone are not enough. True power in the international financial system does not stem merely from which currency obligations are denominated in, but from how those obligations are settled.

Payment systems are the invisible infrastructure that enables the flow of money between countries, banks, and companies. As long as they work, no one notices them. But when access to them is restricted, it becomes clear that without them, global trade and finance cannot function normally.

Reserve currency is not the same as a payment system
A common misconception in public debates is equating a reserve currency with a payment system. The dollar is a reserve currency, but its power lies not only in the currency itself, but in the ecosystem that supports it: banks, clearing systems, legal frameworks, and settlement mechanisms.
Therefore, replacing the dollar is not a trivial task. Even if countries wanted to abandon the dollar as a reserve, they would still need the infrastructure to settle transactions. This is exactly where the construction of alternatives begins.
SWIFT as the backbone of the existing order

SWIFT is not a payment system in the narrowest sense, but a communication network that allows banks to securely and standardizedly exchange payment messages. Nevertheless, it plays a key role: without it, integration into the global financial system is significantly more difficult.

Exclusion from SWIFT is therefore not a technical inconvenience, but a systemic blow. It doesn’t just mean slower payments; it means losing access to the entire ecosystem of trust.

Why exclusion from SWIFT goes beyond the technical level

When a bank or country is excluded from SWIFT, it doesn’t just lose a communication channel. It also loses the implicit confirmation that it is part of the global system. This has consequences for:

  • trade,
  • financing,
  • insurance,
  • and long-term economic stability.

Therefore, the desire for alternative channels is logical, not ideological.

CIPS: China’s answer to systemic vulnerability

The Chinese CIPS (Cross-Border Interbank Payment System) is often presented as a direct replacement for SWIFT. This is a misinterpretation.

CIPS is a settlement and payment system focused primarily on transactions in yuan. Its primary purpose is not the exclusion of the West, but to ensure the functioning of cross-border payments even in the event of restrictions in other systems.

What CIPS actually is – and what it isn't

CIPS:

  • enables settlement of transactions in yuan,
  • connects banks within and outside of China,
  • operates according to its own rules and jurisdiction.

CIPS is not:

  • a global replacement for SWIFT,
  • a universal system for all currencies,
  • or a political tool for excluding others.

Its role is complementary, not revolutionary.

Growth and scale of CIPS

In recent years, the volume of transactions via CIPS has gradually increased, especially in trade where China is a direct participant. This is logical: countries already doing business with China have an interest in using a system that reduces additional layers of risk.

However, it is important to emphasize that the scale of CIPS is still significantly smaller than that handled by SWIFT. This confirms that it is not a replacement, but a supplement.

BRICS: A political framework, not a single currency

BRICS is often mentioned in the context of a “new world currency.” In reality, it is primarily a political and economic framework for cooperation, not a homogeneous monetary project.

Member countries have different interests, different currencies, and different degrees of capital market openness. The idea of a single common currency is therefore more rhetorical than realistic.

Why the idea of a "BRICS currency" is misleading

The introduction of a common currency requires:

  • deep fiscal alignment,
  • a shared monetary policy,
  • a high degree of mutual trust.

This is something BRICS as a group does not have – nor does it need. Their goal is not the creation of a new center, but reducing dependence on the existing one.

Gold as collateral, not as a medium of exchange

In discussions about alternative systems, gold often appears. It is important to understand its role: gold is not intended for daily payments, but acts as collateral and an anchor of trust.

In some bilateral agreements or conceptual frameworks, gold appears as insurance, not as a transactional currency. This is a subtle but crucial difference.

Regional settlements and bilateral agreements

Alongside major systems, there are also:

  • regional payment mechanisms,
  • bilateral agreements for settlement in local currencies,
  • direct clearing connections between central banks.

These mechanisms are often limited in scale but extremely important as a safety net.

Why these alternatives are not meant for everyday use

Parallel systems are not designed to replace the existing order in normal conditions. Their value is proven in extraordinary circumstances.

Much like a backup generator: most of the time it goes unused, but when it is needed, it is invaluable.

Fragmentation instead of system replacement
Instead of one dominant system, multiple parallel hubs are emerging. This increases complexity but reduces the risk of a single failure paralyzing the entire system.
What this means for the dollar and the euro

The dollar and the euro remain central currencies of the global system. Their role is not diminishing because someone is rejecting them, but because the need for absolute dependence is decreasing.

This is an important distinction.

The limits of alternative architecture

Alternative systems have limitations:

  • lower liquidity,
  • greater fragmentation,
  • higher transaction costs.

Therefore, they do not replace the existing order, but supplement it.

Expert Insight

The Bank for International Settlements often warns:

“Payment systems are the plumbing of global finance. We only notice them when they stop working.”

This thought accurately describes why countries today are investing in infrastructure that is invisible most of the time.

Conclusion

Establishing parallel payment systems is not a rebellion against the existing order. It is insurance. Countries are not building alternatives to bring down the West, but to reduce the risk of unilateral exclusion.

The world is not moving toward a single new center of power, but toward multiple parallel paths. This increases the system’s resilience, even if it makes it more complex.

In the next article, we will look at the divergence in the interpretation of these changes within the West – between central banks, politicians, and economists – and why even they do not have a unified view of what is really happening.