Despite bold rhetoric from BRICS leaders at their latest summit, experts say the bloc’s push to move away from the U.S. dollar faces enormous structural and political obstacles.
BRICS leaders used the summit to assert the need for greater use of local currencies in intra-BRICS trade, driven by frustration over geopolitical tensions, U.S. sanctions, tariff policy, and recurring currency devaluations.
South African President Cyril Ramaphosa called on the bloc to “press ahead with greater use of local currencies, stronger cross-border payment systems and deeper financial interconnectivity.”
Iranian President Masoud Pezeshkian warned that the current financial system is “vulnerable to political shocks due to its concentration on a limited number of currencies,” signaling a desire to diversify away from the dollar.
Energy-rich economies such as Iran and Russia, both BRICS members facing U.S. sanctions, urged the bloc to build independent payment, settlement, and depository infrastructure to reduce dollar dependency.
Data from the Bank of International Settlements shows the U.S. dollar made up 89% of the forex market as of April, up one percentage point from the previous year, while the euro and yen accounted for 29% and 17% respectively.
Collectively, the 10 BRICS member nations accounted for 27% of world output, 24% of merchandise exports, and 22% of foreign direct investment inflows in 2024, according to a United Nations Trade and Development report published in March.
Despite that collective economic weight, intra-BRICS trade accounted for only about 5% of world trade as of 2024, highlighting a significant gap between the bloc’s ambitions and its current reality.
The BRICS 2026 summit declaration contained no mention of a common currency or concrete details on trade settlements using local currencies, with the BRICS Payment Task Force simply asked to develop “practical solutions for cross-border payments.”
Jayant Krishna, senior fellow at the Center for Strategic and International Studies, told CNBC that BRICS lacks the unified institutional, financial, and macroeconomic infrastructure needed to substitute the “inherent liquidity and trust” of the dollar globally.
Reema Bhattacharya, head of Asia research at Verisk Maplecroft, noted that “Russia and China now settle close to ninety percent of their trade in rubles and yuan,” but said that shift was driven by U.S. sanctions after 2022 rather than any coordinated BRICS policy.
Bhattacharya identified the “India-China rivalry” as the “single biggest brake on cohesion across the bloc,” citing competition in manufacturing, technology, investment, and regional influence as key friction points.
China-India trade hit a record $151.1 billion in the year ending March 2026, but India’s trade deficit with China also surged to a record $112.16 billion, up from $99.21 billion the prior year.
India’s goods and services trade with the United States reached around $239 billion in 2025, including a goods trade surplus of $58.4 billion and a services trade surplus of $4.7 billion, making a dollar shift strategically unfavorable for New Delhi.
Krishna Bhimavarapu, APAC Economist at State Street Investment Management, noted that BRICS members have “vastly different priorities,” with Russia and Iran seeking sanctions relief, China pushing renminbi internationalization while maintaining capital controls, and India focused on rupee expansion.
U.S. President Donald Trump has previously threatened BRICS nations with 100% tariffs if they moved to create or back any alternative to the dollar, writing that countries should “expect to say goodbye to selling into the wonderful U.S. Economy.”
Most BRICS currencies lack deep liquid markets outside their home economies, discouraging exporters from accepting them and keeping dollar invoicing the default choice for global commodity trade, Bhattacharya explained.
Bhimavarapu concluded bluntly that “no BRICS-led alternative currently matches the liquidity and market depth, credibility and global acceptance of the Dollar,” suggesting de-dollarization remains a distant aspiration rather than an imminent reality.
