Will the BRICS Currency Beat the U.S. Dollar?

The global financial landscape has entered a historic phase of transformation. For nearly eight decades, the U.S. dollar has been the undisputed king of international trade, investment, and reserves. But with the rise of emerging economies—particularly those grouped under the BRICS alliance (Brazil, Russia, India, China, and South Africa, now expanded to include new members such as Saudi Arabia, Iran, Egypt, Ethiopia, and the United Arab Emirates)—a new question dominates global economic discourse: Can the BRICS currency dethrone the U.S. dollar as the world’s dominant reserve and trade currency?

The answer is complex and depends on an intricate mix of economics, politics, technology, and trust. While some analysts predict a multipolar world where the dollar coexists with competing regional currencies, others argue that the structural advantages of the U.S. dollar remain nearly impossible to dislodge. To understand the dynamics of this financial rivalry, it’s essential to explore both the strengths and vulnerabilities of each system—and the strategic ambitions behind the BRICS initiative.

The Historical Dominance of the U.S. Dollar

The dollar’s supremacy began in the aftermath of World War II, when the Bretton Woods Agreement of 1944 established the U.S. dollar as the backbone of the international monetary system. Pegged to gold, the dollar became the world’s reference currency. Even after the Nixon Shock of 1971, which ended gold convertibility, the dollar’s dominance persisted because of the economic power of the United States, the global reach of its financial institutions, and the strategic alignment of its allies.
Today, the dollar is used in over 85% of global foreign exchange transactions, constitutes nearly 60% of central bank reserves, and dominates trade invoicing in critical sectors such as energy, technology, and defense. The petrodollar system, linking oil sales to the dollar, further strengthened America’s global influence by ensuring continuous demand for the U.S. currency.
Yet, as global trade dynamics shift eastward and geopolitical tensions deepen, the dollar’s uncontested dominance is being challenged in unprecedented ways.

The BRICS Vision: Toward De-Dollarization

The BRICS bloc represents over 45% of the world’s population and nearly one-third of global GDP. Originally formed as an economic partnership to promote growth and cooperation among emerging markets, it has increasingly evolved into a strategic counterweight to Western economic institutions such as the IMF and the World Bank.
The concept of a BRICS currency—often referred to as the “BRICS Pay” or “BRICS Coin”—emerged from discussions centered on de-dollarization, the process of reducing dependence on the U.S. dollar for international trade and finance. The motivation is both economic and political:

• Economically, BRICS nations want to insulate themselves from dollar-based volatility and U.S. interest rate policies.
• Politically, they seek to gain autonomy from the U.S.-dominated global financial order, where sanctions, SWIFT restrictions, and access to capital markets can be used as tools of pressure.

At the 2023 BRICS Summit in Johannesburg, leaders reaffirmed their intention to create a more balanced global monetary system. Although no formal BRICS currency has been launched yet, the framework for a shared payment and settlement infrastructure is being actively developed, including discussions around using a commodity-backed digital currency and increasing the use of national currencies in trade between member states.

Why the BRICS Challenge Matters

The push for a BRICS currency has broad implications. If successful, it could:

1. Reduce the power of U.S. sanctions by allowing trade outside the dollar system.
2. Increase South-South trade efficiency through direct currency settlements.
3. Diversify global reserves, giving central banks more flexibility.
4. Shift global investment flows toward non-dollar assets.

Already, countries like China and Russia have been settling more trade in yuan and rubles, and India has begun using rupees for some imports. The New Development Bank (NDB), often described as the BRICS counterpart to the World Bank, also promotes lending in local currencies rather than dollars.
This gradual but steady process signals a potential shift from a unipolar to a multipolar financial system—one where the dollar remains important, but not absolute.

The Strengths of the BRICS Approach

1. Massive Economic Scale:
2. BRICS nations collectively control vast natural resources, manufacturing bases, and markets. China is the world’s largest exporter, India is a major tech and services hub, and Russia and Saudi Arabia dominate energy exports. This resource diversity gives the bloc economic leverage to support an alternative trade currency.
3. Commodity-Backed Stability:
4. Unlike fiat currencies, which are based on government credit, a proposed BRICS currency might be backed by gold or a basket of commodities such as oil, gas, and rare earth metals. This could appeal to nations seeking a more stable alternative to inflation-prone fiat systems.
5. Digital and Blockchain Integration:
6. The use of blockchain technology for settlements could reduce transaction costs, increase transparency, and bypass Western-controlled systems like SWIFT. Some analysts expect that a digital BRICS token could be used in cross-border settlements without relying on correspondent banking.
7. Political Alignment on De-Dollarization:
8. Many countries outside the West—especially in Africa, the Middle East, and Asia—see BRICS as a potential leader of a fairer, multipolar order. The expansion of BRICS in 2024 added several resource-rich countries, further strengthening its geopolitical footprint.

The Challenges Facing the BRICS Currency

While the ambitions are large, the obstacles are formidable:

1. Lack of Unified Monetary Policy:
2. The BRICS nations have vastly different economic systems and interests. China’s economy is export-driven with a managed currency; India’s is service-oriented with a floating rupee; Russia’s economy is commodity-based and heavily sanctioned. Achieving consensus on monetary governance is extremely difficult.
3. Geopolitical Rivalries Within BRICS:
4. India and China, despite being key members, have border tensions and strategic mistrust. Saudi Arabia and Iran, both recent additions, are historical rivals. Internal divisions could undermine cooperation.
5. Trust and Convertibility:
6. For a currency to become global, it must be freely convertible, transparent, and trusted by international markets. So far, none of the BRICS nations offer full capital account openness. Investors may hesitate to hold a currency issued by states with restrictive monetary regimes.
7. Institutional Infrastructure:
8. The U.S. dollar benefits from a deep and liquid financial system, vast global acceptance, and clear legal frameworks. The BRICS bloc still lacks a unified central bank, legal framework, and settlement mechanism at the same scale.
9. Technology and Interoperability:
10. Creating a shared digital currency that can be securely and efficiently used across vastly different banking systems is technically complex. Interoperability with national systems must be achieved without exposing vulnerabilities to cyber threats.

The U.S. Dollar’s Structural Advantages

Despite the rising momentum behind de-dollarization, the dollar retains immense advantages:

• Liquidity and Depth: The U.S. Treasury market is the largest and most liquid in the world, giving investors confidence and accessibility.
• Military and Political Power: The global reach of the U.S. military and alliances like NATO underpin trust in the dollar’s continuity.
• Institutional Confidence: The Federal Reserve, though criticized, remains a stable and transparent institution compared to the opaque policies of some BRICS governments.
• Network Effects: Because most trade and finance are already denominated in dollars, switching costs are high. Once a global standard is entrenched, it tends to persist for decades.

Even countries that criticize U.S. dominance continue to store reserves in dollars and price exports in dollars—not necessarily out of preference, but out of necessity.

The Path Forward: Coexistence or Competition?

Rather than an immediate overthrow, the most likely scenario is gradual coexistence. The BRICS currency or settlement mechanism could increasingly handle trade between member countries and allied partners, while the dollar remains the global reference for international finance.
Over the next decade, we may see the emergence of regional monetary ecosystems:

• The BRICS bloc using its commodity-backed settlement unit for South-South trade.
• The European Union relying more on the euro for internal and external transactions.
• The United States and its allies maintaining dollar dominance in high-value finance and technology exports.

In this multipolar monetary world, no single currency will dominate absolutely—but the dollar will face its first serious competitor since the rise of the euro.

The Role of Gold and Digital Assets

Interestingly, the rise of gold accumulation and central bank digital currencies (CBDCs) connects both sides of the debate. BRICS countries, especially China and Russia, have been aggressively buying gold, while simultaneously developing digital versions of their national currencies (like the digital yuan and digital ruble). A gold-backed digital BRICS token could theoretically combine trust, transparency, and technological efficiency—qualities that could make it attractive to developing economies frustrated with dollar volatility.
At the same time, digital currencies like Bitcoin and stablecoins challenge both the BRICS and the U.S. dollar systems, representing a decentralized alternative to state-backed money.

The Geopolitical Factor

The strength of any global currency is as much about power and influence as it is about economics. The dollar’s dominance is anchored in the U.S. geopolitical network—its military presence, alliances, and ability to project soft power globally.
For the BRICS to rival this, it must create not only a financial system but also a parallel global order that countries trust more than the existing one. That requires deep coordination, long-term stability, and the perception of fairness—qualities that take decades to build.
The Ukraine conflict, U.S.-China tensions, and Middle East realignments have accelerated discussions about alternatives to the dollar, but they have not yet produced a clear substitute.

Conclusion: Can the BRICS Currency Beat the Dollar?

In the short term—no. The U.S. dollar’s institutional depth, global acceptance, and liquidity are unmatched. However, in the long term—perhaps over the next two to three decades—the balance of monetary power could shift gradually toward a more diversified system where the BRICS currency plays a significant regional or even global role.
The BRICS initiative symbolizes the end of dollar absolutism, not the immediate fall of the dollar. Its greatest achievement may not be to replace the dollar but to rebalance the global system, forcing reforms in international finance and reducing the geopolitical leverage that comes with currency monopoly.
Whether or not the BRICS currency “beats” the dollar, it has already changed the conversation. It reflects the growing confidence of the Global South, the technological evolution of money, and the recognition that in the 21st century, economic power is no longer unipolar.
The dollar may remain the world’s most powerful currency for now, but the age of competition has begun—and the outcome will shape the financial architecture of the next century.