Can the BRICS currency challenge dollar dominance in 2025? Standfirst
· BRICS nations are talking more about using their own currencies and developing an alternative payment system, but no unified BRICS currency is imminent.
· The group’s growing economic strength raises important questions about the global role of the US dollar.
· This post breaks down current events, why they matter and what the future might hold.
BRICS—Brazil, Russia, India, China, South Africa, and new members—want to use fewer US dollars in international trade. They are building systems such as BRICS Pay to fund projects in their own currencies and exploring the idea of a shared money system.
But can they really compete with the entrenched, globally dominant US dollar?
Why retreat from the dollar
The dollar underpins many global systems, including SWIFT. BRICS alternatives like BRICS Pay, a decentralized payment network, let members trade directly in their own currencies, at lower cost and with more transparently.
The New Development Bank has pledged to fund projects using local currencies, reducing exposure to dollar fluctuations. Trade within BRICS is significant, and members are wary of relying on the dollar amid sanctions and unpredictable US policies.
How realistic is a common BRICS currency?
Some advocate for a shared BRICS currency backed by gold or a basket of currencies, but experts say this is technically unfeasible right now. Internal economic differences and political divides make such a project highly nlikely.
BRICS strategy vs. dollar dominance
Focus area BRICS actions Current reality
Shared currency Discussions only Dollar remains main global reserve
Payment systems Building BRICS Pay for local currency settlements SWIFT and dollar systems still widely used
Institutional tools New Development Bank, Reserve Pool Helps internally but not outward facing like IMF
Economic unity Shared ambition, but political differences persist Coordinated plans still face major hurdles
US response Push for de-dollarization Facing threats of tariffs and stronger dollar policy
Global perception Eroding trust in US policies Dollar still central, but cracks begin to show
Why replacing the dollar is not easy
Dreaming of replacing the dollar is one thing, delivering it is another.
The US dollar is trusted because the American economy is largely stable, and its financial system is open. By contrast, some BRICS members have histories of inflation, currency instabilities and policy changes, issues that undermine investor confidence.Economic structures also diverge. Chian is export-driven, India is fast-growing but still developing, Brazil relies heavily on commodities and Russia is under sanctions.Agreeing on a single currency policy would be extremely difficult.
Implications for ordinary people
If BRICS pay works, sending money between member countries could be faster and cheaper. Tourists and business travellers within BRICS might avoid converting local currencies into US dollars first. However, these are currently mere possibilities and not yet guarantees. Success hinges on whether BRICS countries can cooperate; the nations are already making strategic moves like building payment alternatives and funding development in their own currencies.
The takeaway
The dollar is not overthrown but is being challenged. The global financial system is becoming more diverse, but in a slow and uncertain manner. To know how these global shifts impact banking investments or credit decisions, head to BankQuality for honest reviews