BRICS Plans New Trade Model Without The Dollar

Can the dollar lose its global supremacy ? What was speculation yesterday is now taking a concrete diplomatic turn. As the BRICS summit in Rio approaches, major emerging economies are placing transactions in local currencies at the heart of their strategy. This shift is set against a backdrop of increasing geopolitical tensions and demands from the global South for a more balanced financial system. Behind this dynamic lies a possible redefinition of the rules of global trade.

Trade in local currencies establishes itself as a diplomatic priority

While the dollar’s hegemony is coming to an end , Denis Alipov, Russian ambassador to India, stated that “the BRICS bloc is a serious platform to discuss common solutions to major challenges,” during a conference organized in New Delhi by the Brazilian embassy and the Center for Global Perspectives of India.

The diplomat confirmed Moscow’s commitment to expanding trade exchanges in national currencies, noting that this mechanism was already in use among certain members.

He also sought to dispel suspicions about an anti-Western strategy of the bloc: “the BRICS alliance is not a counter-bloc. It is a center of gravity for countries seeking mutual respect and non-interference.”

On the Brazilian side, Ambassador Kenneth da Nobrega also emphasized the effectiveness of this approach: “it’s a long road. But trade in local currencies? It already works.”

This strategic direction aims to strengthen the monetary resilience of member economies in the face of turbulence in the dollar-dominated system. It fits within a context of increasing questioning of the global economic order, fueled notably by American protectionist policies and the persistent threat of extraterritorial sanctions.

In this regard, several points clearly emerge from these diplomatic exchanges :

• Trade in local currencies is already a reality among some BRICS members, notably between Russia, India, and China ;
• This dynamic aims to reduce dependence on the dollar in bilateral and multilateral transactions ;
• The project is not presented as a confrontation with the West, but rather as a lever for economic emancipation ;
• The initiative enjoys broad diplomatic consensus, unlike more sensitive issues such as the common currency or bloc governance ;
• The integration of new members such as Iran, Indonesia, or the United Arab Emirates strengthens the geo-economic legitimacy of this strategy.

This coherent stance, expressed a few weeks before the Rio summit, marks an important step in the BRICS bloc’s financial disintermediation strategy.

It also paves the way for more technical discussions on the connectivity of local payment systems and interoperability of national currencies, without crossing the institutional threshold that a common currency would represent.

A common currency? A project still far from reality

While the idea of a single currency within the BRICS has long captured attention, especially in crypto and economic spheres, official statements have just dampened short-term expectations.

“Discussions around a common BRICS currency are at a very preliminary stage,” said Dammu Ravi, the Indian representative of the group and secretary for economic relations. He added: “for now, we are focusing solely on settling exchanges in national currencies. The harmonization of fiscal and monetary policies is extremely hard to achieve.” This position translates India’s cautious stance, a key country in the bloc.

Technical and political constraints are numerous. Monetary alignment requires long-term macroeconomic convergence, but also institutional coordination which the BRICS currently do not have.

Brazil acknowledged this as follows: “deeper integration, such as a common currency, requires years of political alignment.” These words show that the ambition exists but the conditions for feasibility are not yet met. Economic divergences among members, in terms of inflation, exchange regimes, or political stability, complicate any attempt at monetary standardization. Even within the European Union, the process took several decades.

Beyond the monetary challenge, the reluctance also reflects political realism. Rushing a common currency project could undermine group cohesion. The message sent to Rio is therefore one of gradual cooperation, based on concrete common grounds such as localized trade, as evidenced by the transition to local currencies , before potentially addressing a more ambitious monetary union. From a geopolitical perspective, this pragmatic approach could strengthen the bloc’s legitimacy and avoid internal tensions. Ultimately, technological developments, notably in sovereign digital currencies (CBDCs), could revive discussions in a different form.