The BRICS bloc—comprising Brazil, Russia, India, China, and South Africa—appears to be moving away from the ambitious de-dollarization agenda that has been advocated by Russia and China. Despite earlier discussions at summits, the prospect of establishing a unified BRICS currency or payment system faces challenges due to differing priorities and economic realities among member states.
Putin’s Theatrics and Russia’s Push
At the 16th BRICS summit in Kazan, Russian President Vladimir Putin showcased a mock-up BRICS currency note, symbolizing the country’s desire to move away from the U.S. dollar. Russia has been particularly vocal about de-dollarization, motivated by sanctions imposed after its invasion of Ukraine in 2022. Putin highlighted the potential for using national currencies for settlements, a vision that aligns with Russia’s broader economic strategy.
However, analysts remain skeptical of such moves. Observers note that despite Putin’s rhetoric, other BRICS members show little enthusiasm for a shared currency, citing its impracticality without deeper economic and political integration.
India, Brazil, and South Africa Step Back
Countries like India, Brazil, and South Africa have expressed reluctance to advance the de-dollarization agenda. India’s economy, closely tied to the U.S. through its IT sector and trade partnerships, would face significant risks by diminishing its reliance on the dollar. Similarly, Brazil has acknowledged the technical and political challenges of creating a unified currency, while South Africa has adopted a cautious stance.
India’s participation in BRICS-led payment systems, such as the Cross-Border Payments Initiative, remains voluntary and non-binding. Analysts argue that India’s focus on becoming a global economic powerhouse depends on the stability provided by the U.S. dollar.
Technical and Economic Barriers
The BRICS proposal to create an alternative to the SWIFT payment system also faces logistical hurdles. Currency fluctuations and the absence of a robust mechanism to sustain such a system complicate its implementation. Critics argue that even a BRICS payment network would still require the U.S. dollar as a reference currency, undermining the de-dollarization goal.
Gopal Tripathy, a treasury expert, highlighted that creating a parallel payment ecosystem would be necessary for success. Without it, member states will struggle to transact effectively with non-BRICS countries.
China and Russia’s Persisting Efforts
China and Russia continue to push for financial independence from the dollar, with support from sanctions-hit Iran. While limited progress has been made in localized transactions using national currencies, the broader goal of de-dollarization remains distant.
The Kazan Declaration, adopted after the BRICS summit, was vague on concrete steps for a unified payment system, underscoring the lack of consensus within the bloc.
The BRICS bloc’s de-dollarization agenda appears to be faltering as economic realities and diverging interests among member states take precedence. While Russia and China persist in their efforts, the broader initiative lacks unity and technical feasibility. Analysts caution that without substantial economic compromises and institutional support, de-dollarization will remain an aspirational, rather than achievable, goal.
For now, the U.S. dollar retains its dominance as the global reserve currency, underscored by its stability and widespread acceptance.
Related Stories:
Trump threatens 100% tariff on BRICS countries if they pursue creating new currency
Russia to Host Landmark BRICS Summit in Ongoing Bid to Reshape World Order
Bolivia invited to become a BRICS partner country and responded positively
Putin Warns of Middle East Crisis and Ukraine at BRICS Summit
