For two years, headlines touted a BRICS common currency (or a blockchain-style settlement unit) that might chip away at the dollar’s dominance. Summits produced language on alternative payments and local-currency trade, plus talk of new systems insulated from sanctions.
Why momentum keeps slipping
-
Divergent interests: India has repeatedly signaled that “de-dollarisation” isn’t its financial agenda, preferring to grow local-currency trade rather than join a grand currency project. Brazil stresses practicality; Russia and China favor faster moves away from SWIFT and the dollar—but consensus on design and governance is thin.
-
Capital controls & convertibility: A credible shared currency needs deep, open financial markets and agreed governance. Several BRICS economies run capital controls or manage exchange rates tightly—features that reduce global investors’ willingness to hold a new unit at scale. (Analysts—from banks to think tanks—call a near-term common currency unlikely.)
-
Politics and risk: The group is larger (BRICS+), more diverse, and geopolitically split. Even where payment pilots or messaging systems advance, common currency timelines slip from “this year” to “some day.”
What’s actually changing
Instead of one new money, BRICS members are expanding local-currency settlement and exploring cross-border payment rails—incremental steps that trim dollar usage at the margins without replacing it. Expect more bilateral rupee-dirham or yuan-ruble deals, not a shared BRICS coin in your wallet.
Cause → Effect, in plain terms
-
Cause: Lack of trust + different macro needs + no shared central bank.
Effect: Ambition narrows to plumbing (payments), not a currency. -
Cause: Capital controls & convertibility limits.
Effect: Global investors won’t hold a BRICS unit widely; borrowing costs would rise. -
Cause: Political signals (including tariff threats, sanctions climate).
Effect: More hedging behavior, but not a clean break from the dollar.
Bottom line
The dollar remains entrenched. De-risking is real; replacement is not. The near-term story is spikier, multi-currency trade—but still inside a dollar-shaped system.
