MONEY on an Alternative Route to the Axis of Evil?

Brazil Between the CIPS System and the Geoeconomic Siege Under Trump

This article is also available in Brazilian Portuguese. 👉 

By Antonio Fernando Pinheiro Pedro

Introduction

With the rise of alternative financial systems like CIPS—a Chinese infrastructure rivaling SWIFT—a new geoeconomic map is being drawn. In it, Brazil emerges as a battleground for competing financial hegemonies.

The metaphor of the “currency hydra thief” captures this phenomenon: underground flows that dodge the dollar's radar and Western control mechanisms.

If this transition consolidates, a potential Trump administration could retaliate strongly—applying sanctions, systemic reviews, and diplomatic blockades. Brazil would become a key piece in a hostile chessboard.

Parallel Advance: CIPS and the New Settlement Order

It’s essential to understand how the Chinese system “bypasses” the Western structure that ensures financial integrity.

The CIPS (Cross-Border Interbank Payment System), promoted by China, offers yuan-based settlements without relying on the dollar.

• It is the backbone of the strategy to circumvent the SWIFT system—and by extension, Western sanctions.

• Its adoption in Brazil (via fintechs or state agents) places the country along a murky and unapproved financial route, outside OCDE and IMF protocols.

The “Currency Thief”: A Threat to Financial Integrity

Using this system threatens decades of progress in international finance against corruption, money laundering, organized crime, and terrorism.

By diverting currency flows to non-dollar-tracked paths:

• The coercive power of American sanctions is diluted

• U.S. Treasury control over international transactions is weakened

• Brazil is seen as a permissive jurisdiction for opaque financial dealings

The Trumpist Reaction: A Likely Scenario

Republican-led U.S. administrations not only maintain strong stances against corruption, narcotrafficking, and terrorism—they typically intensify enforcement.

Under Trump, the American geoeconomic apparatus may:

• Reactivate secondary sanctions (penalizing entities linked to CIPS)

• Apply strict audits to Brazil’s financial integrity with FATF and OFAC support

• Impose preventive financial blockades, pressuring banks and fintechs in Brazil

• Implement Section 301 investigations targeting illicit economic activities by the Brazilian state and its actors

Escaping SWIFT is essentially declaring war on Western financial governance.

Crisis in the Consolidated Financial Market

Large Brazilian banks, traditionally aligned with SWIFT—and many supporters of Brazil’s leftist government—are poised to take a strategic hit.

These banks face:

• Double regulatory compliance, increasing operational costs

• Risk of breach in international contracts

• Reputational pressure from dealing in unapproved currencies

Fragmentation between formal banking and opaque new channels further undermines the credibility of Brazil’s currency and national assets.

Regulatory Dumping and Ideological Fintechs

The long-awaited “rebanking” of the financial system—desired by traditional banks and disrupted by Paulo Guedes’ economic flexibility—was postponed by the current regime to steer Brazil toward the “Axis of Evil.”

Government-aligned fintechs engage in:

• Regulatory dumping—operating beyond Central Bank oversight

• Capture of state incentives through political connections

• Non-compliance with international supervision and standards

Inspired by the Chinese model, these structures amplify:

• Legal vulnerabilities in Brazil’s financial system

• Foreign partners’ distrust

• Room for institutionalized corruption

Financial Submission and Technocratic Colonization

By embracing the “juristocratic-Lulist” regime, Brazil’s financial system dug its own grave—pushing the country outside Western financial networks.

Integration into a China-centered model threatens:

• Autonomy in exchange management

• Foreign regulatory infrastructure implantation

• Technological and systemic dependence on China

This submission is not just monetary—it’s structural and institutional.

Lawless Land: Paradise for Criminal Organizations

Brazil risks becoming a lawless zone.

Lack of interoperability with Western systems facilitates:

• Money laundering through alternative channels

• Anonymous operations by cartels and illicit groups

• Expansion of a parallel financial underworld immune to international audits

Latin America in Flux

The geopolitical effects are immense, justifying U.S. concerns.

China is:

• Building free trade zones without democratic supervision

• Exporting regulatory soft power

• Replicating control structures across infrastructure, tech, and capital

Brazil may be absorbed into a technocratic network far from Western democratic values. The vanguard agents of China's incursion have names and addresses, but their structure and goals remain shrouded.

Ideological Capture and Shadow Finance

CIPS’s silent entry into Brazil happens:

• Without transparency or full technical oversight

• Orchestrated by political and business actors tied to progressive ideologies and geoeconomic narratives favoring de-dollarization and institutional rupture

It reflects an attempt to reconfigure Brazilian financial sovereignty under an ideologically driven plan aligned with the “Axis of Evil.”

These fintechs, often linked to cooperative structures:

• Receive unauditable state incentives

• Maintain ties with anti-capitalist thinkers and authoritarian sympathizers

• Build parallel financial networks beyond the reach of international and Brazilian oversight

This is a strategic capture aimed at:

• Weakening Brazil’s ties with the West

• Consolidating new influence networks over national assets, currencies, and institutions

• Turning Brazil into a peripheral terminal of the Sino-Russian-Iranian authoritarian bloc

Strategic Conclusion

Brazil faces a geoeconomic dilemma:

• Serve as a bridge balancing divergent systems —OR—

• Become a target of financial containment and diplomatic mistrust

The rise of alternative systems is inevitable—but requires:

• Institutional discernment

• Transparent governance

• A clearly defined strategic stance

The issue is grave, involving Brazil’s unique brand of judicial activism, organized crime like the PCC, and the implosion of the National Financial System.

Note: This article is based on data collected by the AICA Report regarding the entry of Chinese payment cards into Brazil.

Antonio Fernando Pinheiro Pedro is a lawyer (USP), journalist, and environmental consultant. He served as Executive Secretary for Climate Change for the Municipality of São Paulo from June 2021 to July 2023. A founding partner of Pinheiro Pedro Advogados, he is a director of AICA (Corporate and Environmental Intelligence Agency). He is a member of the Brazilian Lawyers Institute (IAB) and Vice President of the São Paulo Press Association (API). He was the first president of the Environmental Commission of the São Paulo Bar Association (OAB/SP), president of the Technical Chamber of Legislation of CEBDS (Brazilian Business Council for Sustainable Development), Chairman of the Environment Committee of AMCHAM (American Chamber of Commerce), and a consultant to the World Bank, the UN, and several other organizations charged with improving the state's legal and institutional framework. He is a member of the Strategic Studies Center of the Think Tank Iniciativa DEX, a member of the Superior Council for National Studies and Politics of FIESP (Federation of Industries of the State of São Paulo), President of the Water University Association - UNIÁGUA, Editor-in-Chief of the Portal Ambiente Legal and responsible for the blog The Eagle View.