BRICS and the Drive Towards De-Dollarization: Has It Stalled?

Could BRICS break the dollar’s grip? The answer is coming into sharper focus, and it’s more complicated than either the optimists or skeptics predicted. Since our previous analysis, BRICS has made concrete moves toward de-dollarization while simultaneously confronting harsh economic and political realities. The gap between ambition and achievement has never been clearer.

Before diving into the dollar dynamics, it’s worth rehashing what makes up BRICS. The bloc includes ten full members after adding Egypt, Ethiopia, Iran, and the UAE in January 2024, followed by Indonesia in January 2025. Additionally, thirteen countries were invited to become “partner nations” at the October 2024 Kazan summit, with nine accepting by year-end: Belarus, Bolivia, Cuba, Kazakhstan, Malaysia, Thailand, Uganda, Uzbekistan, and Vietnam.

On paper, the numbers are impressive. BRICS now represents nearly half the world’s population and over 40% of global GDP measured by purchasing power parity. With major oil producers like Iran, the UAE, and potentially Saudi Arabia (still considering membership), the bloc could control close to half of global oil production.

The Trump Factor Changes Everything

After the 2024 U.S. election, President Trump publicly warned BRICS members that he would impose up to 100% tariffs if they backed a new currency or sought to replace the dollar, a threat widely reported by Reuters/AP/others and repeated into early 2025. In December 2024, Trump demanded BRICS members commit to neither creating a new currency nor backing alternatives to what he called “the mighty US dollar.”

The effect was immediate. Brazil’s President Lula, previously one of the most vocal advocates for a common BRICS currency, quietly dropped the idea from Brazil’s 2025 BRICS presidency agenda. Even Russia’s Vladimir Putin, who had displayed what appeared to be a prototype BRICS banknote at the 2024 Kazan summit, publicly stated in November 2024 that Russia was not seeking to abandon the dollar.

“We have not sought to abandon the dollar and we are not seeking to do so,” Putin declared, a remarkable reversal for a leader whose country had seen hundreds of billions in dollar reserves frozen.

The message is clear: challenging dollar supremacy comes with consequences that even rising powers aren’t fully prepared to face.

What’s Actually Happening on the Ground

Despite the retreat from grand currency ambitions, practical de-dollarization continues to advance through less dramatic channels.

Russia and China now handle most of their bilateral trade in yuan and rubles, completely bypassing the dollar. Russian officials said that by the end of 2024 roughly 90% of Russia’s trade with BRICS partners was settled in national currencies, a figure reported by Russian government sources; independent cross-verification across all BRICS members is limited. India completed its first crude oil purchase from the UAE in rupees in 2023, while Brazil and China eliminated the dollar from their bilateral trade through a yuan-real settlement agreement.

These aren’t symbolic gestures. Trade between China and Russia hit a record $244.8 billion in 2024, with China importing 70% of Brazil’s soybeans. The infrastructure for dollar-free trade is being built transaction by transaction, contract by contract.

BRICS Pay has had prototype demonstrations and public proposals since 2024; BRICS officials and analysts have discussed pilots and staged rollouts, timelines vary, and broader deployment remains planned rather than completed. Meanwhile, China’s Cross-Border Interbank Payment System now connects participants across 119 countries, offering an alternative to dollar-dependent SWIFT networks.

The Numbers Tell Two Stories

Here’s where it gets interesting. The dollar’s share of global foreign exchange reserves has declined from roughly 85% in the 1970s to 58% by 2022, a slow but unmistakable erosion. Yet the dollar remains overwhelmingly dominant where it matters most. As of 2024, the dollar is used in almost 90% of foreign exchange transactions and 48% of SWIFT payments, actually an increase since 2014. The renminbi accounts for just 7% of global foreign exchange transactions despite representing nearly 12% of the IMF’s Special Drawing Rights basket.

The disconnect reveals a fundamental truth: central bank reserve diversification is one thing; actual market behavior is quite another.

Why a BRICS Currency Remains a Fantasy

The July 2025 BRICS summit in Rio de Janeiro produced no concrete progress toward a shared currency. The final declaration contained no mention of a common currency or coordinated de-dollarization strategy. Only Lula continues to occasionally raise the idea, and even he does so with decreasing frequency.

The obstacles remain insurmountable in the near term. India has no interest in replacing dollar dependence with yuan dependence. Brazil faces the same calculation. South Africa lacks the economic heft to anchor any alternative, and Russia—desperate to reduce Western sanctions—has proven unwilling to antagonize Trump’s administration over currency matters.

Add to this the fundamental challenge: BRICS currencies aren’t freely convertible, lack deep liquid markets, and inspire little confidence among global investors who prioritize stability and rule of law. The yuan’s progress tells the story. Despite capturing roughly 7% of global foreign exchange transactions according to the BIS 2022 triennial survey, the renminbi’s share of actual international payments through SWIFT has fluctuated between 2% and 4% over the past year—peaking above 4% in late 2024 before declining sharply to around 3% by mid-2025. More troubling for Beijing, the RMB recently fell to sixth place in global payment rankings, behind even the Canadian dollar, after experiencing a 23% decline in payment value in a single month. This volatility and vulnerability to economic headwinds underscores why most countries remain hesitant to make the yuan central to their financial systems.

The Realistic Path Forward

What we’re witnessing isn’t the dollar’s replacement but its gradual marginalization in specific corridors of global trade. Think of it as financial diversification rather than revolution.

BRICS members are building parallel infrastructure—the New Development Bank lending in local currencies, BRICS Pay facilitating settlements, bilateral currency swap agreements reducing dollar dependence for specific transactions. These moves won’t dethrone the dollar, but they do create optionality.

The most realistic timeline? BRICS Pay pilots through 2027, followed perhaps by a settlement unit for intra-BRICS trade by 2028-2030. Not a global reserve currency, but a regional mechanism that reduces friction costs and dollar exposure within the bloc.

For international trade more broadly, especially the $7.5 trillion daily foreign exchange market that dwarfs annual goods trade, the dollar’s position remains essentially unchallenged. Global banks, corporations, and investors show little appetite for shifting to less liquid, less stable alternatives.

The Bottom Line

BRICS is building practical, regional alternatives to dollar-centric settlement while stopping short of a global replacement. 

BRICS has discovered what any challenger to an entrenched system learns: replacing the incumbent is far harder than criticizing it. The combination of Trump’s aggressive warnings, internal BRICS rivalries, and the dollar’s genuine structural advantages has forced a retreat from revolutionary ambitions.

Yet the incremental progress matters. Every rupee oil payment, every yuan-real trade, every ton of gold added to reserves represents a small reduction in dollar dependency. These moves won’t break the dollar’s grip, but they’re loosening it, one transaction at a time.

The dollar isn’t going anywhere soon. But for the first time in generations, it’s facing sustained, practical alternatives in specific trade corridors.