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Examining the BRICS Push to Move Beyond the US Dollar

The global financial landscape may witness a shift as the BRICS nations contemplate moving away from the dominance of the US dollar. With talks of prioritising local currencies for international trade, the bloc poses significant questions about future market dynamics. However, the transition from the global reliance on the dollar presents substantial challenges.

This ambitious agenda sparks debate, with varying opinions about its feasibility. Skeptics question whether BRICS nations can achieve de-dollarization or if it’s merely an idealistic vision. Understanding the complex global currency markets is crucial for grasping the potential impact of this initiative. As the world watches, the real implications are yet to unfold.

Understanding the BRICS De-Dollarization Agenda

The BRICS alliance is aiming to shift away from the US dollar’s dominance in global trade. Their goal is to prioritise local currencies, which could drastically alter the financial landscape. This potential move seeks to end the US dollar’s reign as the world’s primary reserve currency. However, the complexities of currency markets make this a challenging task.

Realities of Implementing De-Dollarization

Despite the ambition, the actual implementation of de-dollarization within BRICS poses significant hurdles. The currency markets are deeply interconnected, and a swift transition is unlikely.

The summit’s discussions revealed stark differences in readiness and willingness among member states to adopt local currencies for trade, underlining the practicality concerns of this initiative.

Currency Dependence Among BRICS Nations

The use of local currencies was surprisingly not a priority during the recent BRICS summit. Though there was talk of de-dollarization, practical steps toward using local currencies were notably absent.

The viability of local currencies such as the Chinese yuan, Russian ruble, and Indian rupee as dominant trade currencies remains questionable. Member nations, for now, are not pushing forward with this agenda as expected.

China’s reluctance to utilise the yuan even with close allies like Russia highlights the ongoing dependence on the US dollar.

Challenges Facing Local Currencies

One major issue is the lack of liquidity in local currencies compared to the US dollar. This makes them less attractive for international trade.

Furthermore, the financial stability and volatility associated with these currencies add layers of risk that businesses might not be willing to take. The establishment of a BRICS currency is far from reality and may take years to materialise.

Current economic conditions suggest that any new currency introduced by BRICS might struggle initially.

The Role of US Dollar Amidst De-Dollarization Discussion

Despite talks of de-dollarization, the US dollar continues to be viewed as a stable option for international trade. Its liquidity and global acceptance provide it with unparalleled strength.

In contrast, initiatives like CBDCs (Central Bank Digital Currencies) introduced by some countries, present challenges due to their inherent volatility. This underscores the US dollar’s position as a trusted currency amidst global economic shifts.

Bloomberg’s Perspective on BRICS Currency Plans

Bloomberg analysts have expressed scepticism about the BRICS de-dollarization plans. According to them, the bloc’s plans are more aspirational than actionable at this point.

They pointed out that the absence of real discussions on how local currencies can be used practically among BRICS members demonstrates the underlying issues with the plan. The concept of a common BRICS currency currently lacks fundamental support mechanisms.

This leaves the US dollar unchallenged as the dominant currency in global trade, at least for the foreseeable future.

Current Trends in BRICS Trade Settlements

Some reports suggest that a significant portion of BRICS trade is already settled in local currencies. However, these figures do not necessarily translate to a reduced dependency on the US dollar.

The complexity of international trade transactions requires a certain level of stability and liquidity that local currencies currently cannot provide.

Future of the BRICS Initiative

The future of the BRICS currency initiative remains uncertain. While the idea of reducing reliance on the US dollar has political appeal, the practical execution faces numerous barriers.

It remains to be seen whether BRICS can develop a cohesive strategy to implement a de-dollarized system effectively. Current trends and economic conditions suggest a long road ahead for substantial change.


The journey towards de-dollarization by BRICS is fraught with complexities and uncertainties. As discussions continue, the US dollar’s dominant status remains largely uncontested.

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