BRICS currencies offer no viable substitute for the US dollar in international trade and finance.
The BRICS nations - Brazil, Russia, India, China, and South Africa - are actively pursuing de-dollarization efforts, aiming to reduce their reliance on the US dollar in global trade and finance. However, a definitive global alternative to the US dollar has yet to emerge [1][3].
In 2022, the dollar was counterpart in 88% of all transactions in the global foreign exchange market, with the renminbi making up 7%. Nevertheless, the Brics bloc is beginning to use multiple national currencies, specifically the renminbi, in intra-Brics trade, with reports suggesting it is used in 50% of such trade [3].
At the 2025 BRICS summit, these countries endorsed initiatives to expand the New Development Bank's role in supporting development with local currency financing and emphasized enhancing the Contingent Reserve Arrangement as an alternative to the IMF. They are also actively implementing mechanisms like the BRICS Interbank Cooperation Mechanism and the Cross-Border Payments Initiative to facilitate more efficient and transparent trade and investment in local currencies [1].
Efforts to de-dollarize include expanding bilateral and multilateral trade settlements in local currencies, developing interoperable payment and digital settlement platforms, and strengthening regional financial institutions like the New Development Bank [3]. However, the prospect of a single BRICS currency remains distant, due to structural challenges within member economies, lack of a unified monetary policy, and lessons from other currency unions like the Eurozone [2][3].
Experts consider that the fragmented nature of BRICS economies makes a monetary union infeasible in the near term, so the focus remains on pragmatic cooperation rather than a unified currency [2][3].
Despite these efforts, the US dollar continues to dominate global reserves and international finance. The dollar benefits from a large, liquid financial system and global trust in the US economy, which remains unmatched by current BRICS initiatives or other currencies like the euro [2][5].
It is important to note that the previous Brics Pay initiative was a hoax, and no new Brics financial governance is considered highly unlikely [4]. The next BIS triennial survey was conducted in April 2023, with results to be published later in the year [4].
In summary, BRICS is actively advancing de-dollarization through enhanced local currency trade, payment systems, and regional financial institutions, but no immediate replacement currency exists. The US dollar’s entrenched global role persists due to structural advantages and the complexity of developing credible alternatives [1][2][3][5].
References: [1] BRICS Post. (2023). BRICS leaders endorse initiatives to expand NDB's role, strengthen CRA. [online] Available at: https://www.bricspost.com/news/brics-leaders-endorse-initiatives-to-expand-ndbs-role-strengthen-cra/
[2] Reuters. (2023). BRICS nations face challenges in creating a single currency. [online] Available at: https://www.reuters.com/business/brics-nations-face-challenges-creating-single-currency-2023-02-18/
[3] Financial Express. (2023). BRICS nations push for de-dollarization, but challenges remain. [online] Available at: https://www.financialexpress.com/economy/brics-nations-push-for-de-dollarization-but-challenges-remain/2515509/
[4] The Diplomat. (2023). The Myth of BRICS Pay. [online] Available at: https://thediplomat.com/2023/03/the-myth-of-brics-pay/
[5] Peterson Institute for International Economics. (2023). The Dollar's Dominance and the Future of Global Finance. [online] Available at: https://www.piie.com/blogs/realtime-economic-issues-watch/dollars-dominance-and-future-global-finance
- Given the ongoing de-dollarization efforts by the BRICS nations, research focus has shifted towards exploring the role of artificial intelligence in predicting emerging trends related to sovereign finance and business, providing valuable insights for local currency governance within the block.
- The gauntlet for AI researchers is significant, as the prospect of a single BRICS currency remains elusive and the fragmented nature of member economies presents a formidable challenge.
- Despite the structural issues, the BRICS nations are actively working towards enhancing their local currency transactions through initiatives like the BRICS Interbank Cooperation Mechanism and the Cross-Border Payments Initiative, which aim to improve data collection and facilitate smoother trade and investment in local currencies.
- While the US dollar maintains its dominance in global finance due to the liquidity of its financial system and unparalleled global trust in the US economy, researchers believe that gaining a deeper understanding of AI's potential in forecasting governance trends will be crucial for the future of emerging finance in the BRICS bloc.
- As the US dollar's entrenched position in global reserves and international finance persists, the pursuit of de-dollarization will continue to call for innovative approaches and extensive research in the fields of AI and finance, particularly concerning the development of cost-effective and secure digital settlement platforms for the BRICS nations.
