In a world once defined by military supremacy, economic power now sits at the heart of global influence. For decades, the United States has enjoyed uncontested economic dominance through the primacy of its currency, the U.S. dollar. However, the global south is showing signs of resistance. The expansion of BRICS and its active pursuit of de-dollarization reflect a conscious effort by emerging economies to shift away from dollar-centric financial systems. The economic and geopolitical transformation symbolises a broader realignment in international power structures.
Formed in 2009 with Brazil, Russia, India, and China, and joined by South Africa in 2010, BRICS now represents over 35 percent of global GDP and nearly half the world’s population. The bloc, initially seen as a symbolic alliance of emerging economies, has matured into a powerful platform of financial and diplomatic coordination. With the inclusion of new members such as Egypt, Iran, Ethiopia, and the United Arab Emirates in 2024, BRICS has moved closer to becoming a global counterweight to the Western-led financial order.
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The expanded BRICS+ bloc is not just about increasing membership; it is about redefining global finance. One of its most notable strategies is de-dollarization: the systematic effort to conduct trade, investment, and development financing outside the U.S. dollar framework. This trend is particularly evident in currency swap agreements and trade settlements in national currencies.
For example, the China-Russia currency swap agreement signed in 2014 allowed both countries to trade in yuan and rubles, bypassing the dollar. As a result, the yuan’s share in Russia’s foreign exchange reserves rose from one percent in 2014 to ten percent in 2019. In parallel, bilateral trade increased by 25 percent, according to Chinese customs data, highlighting how strategic currency realignment can bolster trade volumes and reduce Western financial influence.
Similarly, India and Iran agreed to conduct oil trade using the rupee and rial, allowing them to continue cooperation despite U.S. sanctions. This strategy strengthened India’s foreign exchange position and facilitated increased oil imports from Iran, which reached 300,000 barrels per day by 2019. These bilateral arrangements exemplify a growing trend among BRICS nations to insulate their economies from U.S. financial control.
One of the BRICS alliance's most ambitious projects is the New Development Bank (NDB), headquartered in Shanghai. Unlike the International Monetary Fund (IMF) or World Bank, the NDB emphasizes lending in local currencies. By 2020, over 50 percent of the bank’s $10 billion loan portfolio was issued in currencies other than the dollar. This approach promotes monetary sovereignty and economic resilience, particularly for countries seeking alternative IMF-style conditional loans.
The de-dollarization strategy is also evident in China’s Belt and Road Initiative (BRI), with the China-Pakistan Economic Corridor (CPEC) as its flagship project. Trade between China and Pakistan reached $20 billion by 2019, with the yuan comprising 10 percent of Pakistan’s foreign reserves—a significant rise from near-zero levels just a few years earlier. This shift reflects economic cooperation and a subtle realignment of Pakistan’s monetary reliance.
Perhaps the boldest concept under discussion is the creation of a BRICS currency. Though not yet formalized, the idea involves a blockchain-based, multi-sided payment system allowing seamless cross-border transactions among BRICS members. If realized, this could reshape international trade by providing an alternative to SWIFT and dollar settlements, especially in regions facing Western sanctions.
These steps toward de-dollarization bring a host of global and regional implications. On a global scale, reduced reliance on the U.S. dollar enhances economic independence for member states. Russia, for instance, has expanded its trade with China and India while minimizing exposure to U.S. financial instruments. Similarly, countries like Brazil and South Africa are diversifying their trade portfolios and adopting payment mechanisms aligned with regional priorities.
Increased energy security is another major benefit. India’s oil imports from Russia have surged under rupee-ruble settlement mechanisms. These alternatives reduce vulnerability to Western embargoes and promote more equitable energy partnerships, especially among countries previously constrained by dollar-denominated trade.
De-dollarization also contributes to the rise of new economic centers. Taiwan, for example, has witnessed a boost in tech exports as BRICS countries reduce reliance on Western suppliers. Brazil has deepened its trade with China, reaching $80 billion in annual trade volume. These examples illustrate how alternative financial architectures can accelerate the rise of emerging economies by offering them autonomy in trade and investment.
At the regional level, de-dollarization fosters food security and economic cooperation. South Africa’s increased agricultural trade with Russia, facilitated through non-dollar transactions, has improved wheat imports and reduced costs. This directly contributes to regional stability and food access in Sub-Saharan Africa. Moreover, the BRICS share in global trade has doubled from 10 percent in 2010 to 20 percent in 2020, emphasizing how intra-bloc trade is becoming a credible alternative to transatlantic economic routes.
Nevertheless, the road to de-dollarization is not without risks. Introducing a new BRICS currency or switching trade settlements to local currencies may provoke volatility in exchange rates. Without a global reserve status or market depth equivalent to the dollar, any new currency would face scepticism and operational hurdles. Moreover, developing nations with limited financial infrastructure may struggle to adapt, and their borrowing capacity in international markets could suffer.
Yet, these challenges do not negate the underlying momentum. The global financial system, long anchored by the dollar, is being tested by new realities. Rising U.S. interest rates, weaponization of the dollar through sanctions, and increasing geopolitical fragmentation have prompted many countries to seek alternatives. BRICS provides a framework and a direction for these aspirations, even if full de-dollarization remains a long-term ambition.
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In critical terms, the idea of de-dollarization is no longer hypothetical; it is unfolding in real time. Once uncontested, the dominance of the U.S. dollar now faces tangible competition. While the dollar is unlikely to be dethroned in the immediate future, its position is no longer absolute. The BRICS expansion reflects economic ambition and geopolitical discontent with a system seen as unfairly favoring the West. As such, BRICS is not simply proposing an economic shift but advancing a structural recalibration of global power.
In conclusion, the expansion of BRICS and its drive toward de-dollarization mark a significant turning point in global economics. Through trade realignment, new financial institutions, and strategic cooperation in local currencies, BRICS is building a foundation for a multipolar monetary world. Although challenges remain, especially regarding coordination and credibility, the trajectory is clear. The global south asserts greater autonomy, and BRICS is leading the charge.
