By Fabio Lucas Carvalho

The fall of the dollar to less than 40% of global reservesThe central banks' rush for gold and the BRICS' tests with alternative payment systems reveal a structural constraint: Maintaining military or financial hegemony in the face of sanctions, frozen assets, and a reshaping of the energy trade.

The petrodollar is described as a central mechanism of financial hegemony, functioning as a recycling machine that channels the continuous purchase of US Treasury bonds. These bonds return to the system as funding for high expenditures, including prolonged wars, sustained by the dollar's position as a reserve currency.

Any actor considering diversifying reserves or reducing exposure to this system faces immediate risks. The material points to asset freezes, financial sanctions, and other coercive measures as recurring instruments to maintain discipline within the dollar-based system.

At the same time, the demonstration of brute power encounters material limits. The depletion of resources in prolonged conflicts, coupled with the need to print dollars to cover increasing expenses, creates simultaneous pressures on military and financial hegemony, revealing a structural contradiction.

Domination, according to the text, requires ever-increasing resources, obtained through financial plunder and global indebtedness. Borrowing from the world acts as a financial safeguard against rivals, but increases international reliance on the dollar system.

This dynamic leads to a choice considered inescapable. Either the astronomical spending necessary for military hegemony is maintained, exemplified by a proposed budget of US$1,5 trillion for the War Department, or the dominance of the international financial system is preserved.

The material states that it is not possible to sustain both fronts indefinitely. When the calculations are made, certain theaters of conflict become strategically disposable, at least in theory, given the need to preserve the central financial machinery.

Sanctions, frozen assets and the boost to BRICS

In response to the instrumentalization of the US Treasury bond system, described as de facto monetary imperialism, the BRICS emerge as a strategic choice for the Global South. The group coordinates initiatives aimed at creating alternative payment systems.

The key tipping point highlighted was the freezing, described as theft, of Russian assets following Russia's expulsion from the SWIFT system. The episode involved a nuclear and hypersonic power, amplifying the perception of systemic risk among central banks.

Following this event, the text indicates that central banks around the world began to turn to gold, bilateral agreements, and to seriously consider alternatives to the dominant international payments system.

The move is described as the first serious structural shock to the international financial system since the end of World War II.

However, the BRICS would not be openly trying to overthrow the existing system, but rather to build a viable alternative.

This alternative seeks to finance large-scale infrastructure and enable transactions that bypass the US dollar, reducing vulnerability to sanctions and asset freezes associated with the current global monetary arrangement.

Venezuela is presented as a critical case in this context.

The central question is whether a major oil producer can survive outside the US dollar system without being economically destroyed.

According to the material, the hegemonic system's response was negative. It is up to the Global South to demonstrate otherwise, testing mechanisms that reduce dependence on the dollar in strategic transactions, especially in the energy sector.

The relevance of Venezuela on the geopolitical chessboard is put into perspective by the numbers presented.

The country would account for only 4% of the world's oil imports. China, limiting its specific weight in the systemic dispute.

Iran is described as the key case. About 95% of its oil is sold to China and paid for in yuan, not US dollars, which directly challenges the petrodollar mechanism.

Unity, mBridge, and BRICS Bridge under testing.

One of the scenarios proposed to the BRICS countries envisions the introduction of a non-sovereign trading token based on blockchain, conceived as an alternative to the SWIFT system, which processes at least US$1 trillion in daily transactions.

This token is called a Unit. It is not presented as currency, but as a unit of account intended for settling commercial and financial transactions between participating countries.

The Unit is described as apolitical money. It could be pegged to a basket of commodities or a neutral index, preventing domination by any specific country in the settlement process.

In this sense, it would function similarly to the IMF's Special Drawing Rights, but restricted to the BRICS structure, with its own governance and objectives.

The text also mentions mBridge, which is not directly integrated into the BRICS laboratory. It is a multi-bank digital currency shared between participating central and commercial banks.

The mBridge includes five members, among them the Digital Currency Institute of the People's Bank of China and the Hong Kong Monetary Authority. Another 30 countries have expressed interest in participating.

The mBridge Tough program inspired the BRICS Bridge, which is still in the testing phase. This mechanism aims to accelerate international transfers, payment processing, and account management between participating countries.

The process is described as simple. Instead of converting national currencies into dollars for international trade, the BRICS countries exchange their currencies directly.

The New Development Bank, the BRICS bank established in Shanghai in 2015, is seen as the main connectivity node of the BRICS Bridge, playing a central role in financial infrastructure.

However, the process is currently suspended. All of the bank's statutes are linked to the US dollar, requiring a thorough reassessment before full integration into the BRICS Bridge.

With the bank integrated into the financial infrastructure of member countries, it could handle currency conversion, clearing, and settlement. The material emphasizes that we are still a long way from that stage.

BRICS Pay, interoperability, and the problem of cards.

BRICS Pay is presented as something distinct. It is a strategic infrastructure aimed at building a financial system described as decentralized, sustainable, and inclusive among BRICS+ countries and partners.

The system is in the pilot project phase until 2027. By then, member countries should begin discussions to establish a settlement unit for intra-BRICS trade, no later than 2030.

The material emphasizes that the goal is not to create a global reserve currency, but to offer a parallel and compatible alternative to SWIFT within the BRICS ecosystem.

In its initial implementation, BRICS Pay is described as simple. Tourists and business travelers can use it without opening a local bank account or physically exchanging currency.

Simply link Visa or Mastercard cards to the app and pay using a QR code. This model, however, reveals a problem considered crucial by the source text. The dependence on Visa and Mastercard keeps the system under the surveillance of the United States financial system, limiting the autonomy sought by the BRICS.

The challenge then becomes incorporating cards from BRICS member countries, such as China's UnionPay and Russia's Mir, bypassing the infrastructure dominated by Western companies.

For larger and more complex transactions, the problem persists. Circumventing SWIFT remains the main technical and political obstacle to the consolidation of alternative systems.

All BRICS laboratory tests need to address two central issues. The first is the interoperability of messages, with secure and standardized data formats.

The second is the actual settlement process, involving the movement of funds through central bank accounts, thus avoiding the constant threat of sanctions.

CIPS, Bancor, and the debate over reserve currency.

The teacher michael hudson He is cited as a global reference in the study of solutions to minimize the hegemony of the dollar. He argues that the path of least resistance is to follow the existing Chinese system.

This system is CIPS, the China International Payments System, based on the yuan and used by participants in 124 countries across the globe, according to the material.

Hudson acknowledges the difficulties of creating an alternative from scratch. He positively assesses the principle of Unity, supposedly composed of 40% gold and the remainder in members' coins.

However, he argues that this solution would be better implemented through a new central bank modeled on Keynesian principles, capable of denominating debts and resolving imbalances between countries.

This proposal is reminiscent of Bancor, suggested by Keynes at Bretton Woods in 1944, to prevent serious external imbalances, protectionism, and financial exploitation between nations.

Bancor was vetoed by the United States in the postwar period, when the country was consolidating its hyper-hegemonic position in the international financial system. In an article about the instrumentalization of the oil trade, Hudson argues that the freedom of oil exports by Russia and Venezuela has weakened the United States' ability to use oil as an economic weapon.

This uncontrolled supply would have been seen as a violation of the international order based on US rules, by reducing the US's power to control energy production.

Hudson points out that creating bottlenecks in the oil supply is one of the main ways in which the United States makes other countries economically insecure.

He summarizes five imperatives attributed to the hegemonic system: control of the world oil trade, pricing in dollars, reinvestment of profits in the United States, discouragement of alternative energies, and the absence of legal limits on adopted policies.

Proposals from the Global South and the China Factor

Paulo Nogueira Batista Jr., co-founder of the New Development Bank and vice-president between 2015 and 2017, presents a proposal parallel to Hudson's for a new international currency.

He describes the dollar system as inefficient, unreliable, and dangerous, characterizing it as an instrument of blackmail and economic sanctions.

Batista Jr. argues that the only viable alternative would be the large-scale internationalization of the Chinese currency, although he acknowledges Chinese reluctance to move quickly down this path.

Given this, it proposes the creation of a new currency by a group of 15 to 20 countries in the Global South, including most of the BRICS and other emerging middle-income nations.

This initiative would require the creation of a new international financial institution, an issuing bank with the sole function of issuing and circulating the new currency.

The proposal is similar to Bancor. The issuing bank would not replace national central banks, and the new currency would circulate only in international transactions, without domestic use.

The currency would be based on a weighted basket of the currencies of the participating countries, fluctuating according to the variations of those currencies, in an arrangement described as technically feasible.

The weights in the basket would be determined by each country's share of GDP at purchasing power parity in the aggregate total, giving greater weight to the largest economies.

The high value of the Chinese currency, issued by a solid economy, would foster confidence in the backing of the new currency, according to Batista Jr., even if this generates political tensions.

He acknowledges the risk of negative reactions from the West, including threats and sanctions against countries involved, but stresses the urgency of the historical moment.

The costs of maintaining hegemony are described as increasing and prohibitive. The BRICS, as they prepare for their annual summit in India, are urged to capitalize on this structural window of opportunity.

The text concludes that the hegemonic system is approaching a point where it will lose the ability to unilaterally impose its will, except through total war, a scenario considered extreme and unstable.

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