BRICS, explained.
With China’s rise and its alacrity to challenge American hegemony across different frontiers, the attraction for dealing in local currencies has increased among several BRICS members (Maksym Tymchyk 🇺🇦/Unsplash)
Local currency deals are growing, but a unified challenge to dollar hegemony remains a distant dream.
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A reality check for BRICS and the lofty dedollarisation agendaA reality check for BRICS and the lofty dedollarisation agenda
“We want to do trade with other countries where we pay in digital currencies. It is a necessity for us.”
So said Mohammad Bagher Ghalibaf, speaker of the Iranian parliament, at the deBlock Summit, Iran’s first international blockchain conference, held on the weekend.
Iran’s quest to evade the crippling international sanctions has prompted it to seek an outlet through cryptocurrencies, representing one of the multiple ways in which individual BRICS members have adopted pathways to lessen their dependence on the US dollar. While some progress has been made with national currencies replacing the dollar for bilateral trade among member countries, achieving dedollarisation, challenging the well-entrenched US dollar as the primary international currency, will be a herculean task.
There has never been a formal proposal at BRICS for dedollarisation. At the first BRIC summit in Yekaterinburg, Russia in 2009, the leaders did issued a joint statement advocating, albeit vaguely, a “more diversified international monetary system”. Since then, Russia and China have remained at the forefront of pushing for the reduction of reliance on the greenback, urging a common BRICS currency and the alternate BRICS Pay payment system to rival the Swift system. The ambition has elicited reactions from various American presidents, including threats from Donald Trump.
Over the years, with China’s rise and its alacrity to challenge American hegemony across different frontiers, the attraction for dealing in local currencies has increased among several BRICS members. With the group now opening its doors to new members, advocates for replacing the dollar, including Iran and Egypt, have added their voices to the chorus. In July 2025, Egyptian Prime Minister Mostafa Madbouly confirmed that BRICS member states are increasingly adopting local currency settlements in bilateral financial transactions as part of a broader strategy to reduce reliance on foreign currencies. Egypt’s move to stop trading in dollars won it Chinese accolades.
Why the currency of a single country should remain the sole currency for international trade is a valid question.
This month, Russian Finance Minister Anton Siluanov announced that his country and China had settled 99.1% of its trade payments in rubles and yuan. Similar remarks had been made by the country’s Deputy Prime Minister Alexander Novak earlier this year. In the past, Russian and Chinese officials have emphasised the need to strengthen cooperation in banking, finance, and cross-border payment systems. With expanding sanctions on Moscow, the only way to trade with that country is through national currencies.
A similar agreement has been place between China and Brazil since 2023, when both countries agreed to eliminate the US dollar as an intermediary currency and instead settle trade in their local currencies. China is Brazil’s largest trading partner, with more than US$100 billion bilateral trade annually. President Luiz Inácio Lula da Silva has remained one of the ardent advocates of dedollarisation, characterising the dollar system as an unjust and anachronistic tool of American dominance. However, with its high dependency on the dollar and with more than 80% of its foreign reserves held in the US, Brazil’s voice for dedollarisation isn’t expected to match the shrillness of Beijing and Moscow.
A video call between BRICS leaders in September 2025 (Ricardo Stuckert/Palácio do Planalto)
Trump’s tariff-centred politics have succeeded in pushing BRICS members such as South Africa and Indonesia to distance themselves from dedollarisation and a common currency for BRICS. Following Trump’s threat to apply 100% tariffs to BRICS members contemplating alternative currencies and de-dollarisation in January 2025, Indonesia’s Foreign Ministry spokesperson told reporters that it is “not interested in the issue of de-dollarisation”.
New Delhi, an outlier of sorts in BRICS, has a long history of dealing in its national currency, the rupee, for trade with Russia. In recent times, even while seeking internationalisation of rupee, New Delhi has paid part of its energy bill to Russia in yuan. However, it remains vocally opposed to dedollarisation, dismissing the talk of a common BRICS currency. “The dollar as the reserve currency is the source of international economic stability, and right now, what we want in the world is more economic stability, not less”, External Affairs Minister Subrahmanyam Jaishankar categorically stated in March 2025. Moreover, the scenario of being bound to an alternate currency system led by China alarms India. “Imagine us having a currency shared with China. We have no plans. It is impossible to think of a BRICS currency”, Commerce Minister Piyush Goyal said in February this year.
Meanwhile, Chinese state media has called for greater global coordination to achieve dedollarisation, indirectly admitting that none currently exists.
Why the currency of a single country should remain the sole currency for international trade is a valid question. However, it is also true that the protraction of dollar-led international financial system has given the currency a set of decisive advantages, unlikely to be paralleled by any other currency.
Moreover, the dedollarisation goal pursued by China and Russia isn’t really about creating a more multipolar global financial system, but appears to be driven by China’s desire to lead the world and to bypass US and Western sanctions on Russia and Iran.
While Beijing and Moscow are free to pursue their objectives, divergent national interests, varying levels of economic development, and fear of US retaliation, including tariff threats, will always impinge on the pace towards that end objective.
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