Aleksandar Jakovljević is a research and communications intern at the Center for International Relations and Sustainable Development (CIRSD).

 

The 17th BRICS Summit, entitled “Strengthening Multilateralism for Just Global Development and Security,” took place in 2024 in Kazan, the capital of Russia’s Republic of Tatarstan. This was the first summit since the organization expanded a few months earlier and the largest in its history. Other than expanding official membership—now consisting of nine countries—it hosted representatives from over 30 other states, including Nigeria, Saudi Arabia, Türkiye, and Serbia. Apart from state representatives, UN Secretary-General António Guterres was also present at the summit.

 

The summit officially adopted the status of partner states, which was awarded to 10 countries: Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Thailand, Uganda, Uzbekistan, and Nigeria. Three additional states—Algeria, Türkiye, and Vietnam—have not yet officially responded to the same invitation. Indonesia became a full member in January 2025, paving the way for other partner states to achieve full membership in the future. With its latest expansion, BRICS now accounts for 38.83 percent of global GDP based on purchasing power parity (PPP). When combined with its partner states, BRICS represents 46 percent of global GDP and 55 percent of the world’s population. For comparison, the G7’s share of global GDP based on PPP stood at 29.08 percent in the same year.

 

The summit’s global participation achieved two key objectives. First, Russia hosted a sizeable event with major attendance, positively affecting its global standing after the West tried to label it as a pariah. The idea of Russia’s international isolation has been practically disproven, as the Kremlin demonstrated it still has plenty of willing partners around the world. Second, the summit has advanced the momentum toward a multipolar world. The strong interest of countries in attending this event, Guterres’ decision to acknowledge its importance despite Western condemnations of Russia’s actions in Ukraine, and the expansion of the group to include new partner states all signal a shift away from a U.S.-dominated liberal world order. While the world might not be fully multipolar at this moment, it has surely gotten closer to this reality than ever. This raises an important question: how does BRICS contribute to this emerging world order? Answering this requires an understanding of certain key elements of the existing international order that BRICS seeks to reshape.

 

De-dollarization in the Wake of Global Turmoil

The liberal international order—also known as the rules-based order—was established by Western powers after World War II. As such, it is primarily rooted in free-market capitalism, democracy, and human rights. The post-Cold War unipolar structure allowed the rules-based order to reach its peak, with former communist states integrating into the globalized economy and liberal democracy being recognized as the only legitimate form of governance. With the United States at the helm of the global economy, the U.S. dollar became the world’s dominant trading currency. This provided the United States with substantial leverage over economic and political affairs, allowing it to weaponize its currency through unilateral sanctions against adversaries.

 

However, a series of political and economic shocks—including the rise of Russia and China, the 2008 and 2020 economic crises, and multiple wars such as the ongoing conflict in Ukraine—have gradually fractured the rules-based order. Its slow decline has created space for alternative systems to take shape and challenge long-standing practices.

In the 2021 BRICS foreign ministers’ meeting, the group emphasized “the sole authority of the UN Security Council for imposing sanctions,” a statement that openly condemns American unilateral sanctions. The imposition of additional sanctions following Russia’s invasion of Ukraine has only led to unintended side effects for America’s reputation. Russia’s expulsion from SWIFT and the freezing of $300 billion in assets have raised concerns among other non-Western countries. The result has been a growing number of nations seeking alternatives by applying for BRICS membership, culminating in the 2023 summit’s announcement of the organization’s first expansion since its founding. These events have exposed the global economy’s vulnerability due to its dependence on the U.S. dollar in foreign trade, as well as the willingness of certain countries to take action by promoting the use of local currencies.

 

BRICS has openly supported the use of local currencies through declarations adopted during the Johannesburg and Kazan summits, as well as through its New Development Bank (NDB), which can provide financing in local currencies. Several notable examples highlight BRICS countries’ efforts to expand the use of their local currencies at the bilateral level. The share of Russian ruble-based exports spiked from 10 percent to over 40 percent in the first year of the Ukraine invasion. Russia and China have been using local currencies in their trade since 2010, with about one third of Russian trade conducted in Chinese yuan by the end of 2023. At the 2023 business forum in Beijing, China and Brazil agreed to conduct direct exchanges between the Brazilian real and the yuan. Brazilian banks have also joined the Chinese cross-border payment system, making yuan transactions easier. That same year, India and the United Arab Emirates signed an agreement to conduct trade in Indian rupees. Just a month later, India purchased one million barrels of oil and paid in rupees—an event that occurred mere days before the BRICS summit and the UAE’s official invitation to join the bloc. Similarly, Indonesia began promoting transactions in local currency before becoming a BRICS member. During the 2023 ASEAN summit, Indonesia pushed for more local currency use within the trading bloc. After officially joining BRICS, the Bank of Indonesia signed a memorandum with the Reserve Bank of India to facilitate bilateral trade using their respective currencies.

 

These various bilateral developments demonstrate that de-dollarization has become a serious phenomenon in the Global South, with BRICS membership serving as a unifying factor.

 

The Dollar Strikes Back

However, de-dollarization still faces significant challenges. While local currencies offer certain advantages, such as better exchange rates, the U.S. dollar remains dominant in international trade. As noted in the Carnegie Endowment’s analysis of BRICS and local currencies, “de-dollarization efforts will still face major headwinds, in part because of the relatively higher costs and inefficiencies of using many non-dollar currencies in cross-border trade and finance.” For these reasons, many countries continue to favor the dollar.

As of 2024, the U.S. dollar is still used in almost 90 percent of foreign exchange transactions and 48 percent of SWIFT payments, which actually represents an increase since 2014. Beyond this, the United States will not simply stand by as its adversaries attempt to replace its powerful currency without responding.

 

With U.S. President Donald Trump’s second term now underway, this process has begun facing its first real backlash from the United States. Trump has repeatedly threatened tariffs of at least 100 percent on BRICS states if they continue pursuing de-dollarization, particularly regarding a common currency. The fact that these threats came directly from the president shows that de-dollarization is being acknowledged, and BRICS is taken seriously.

Brazilian President Luiz Inácio Lula da Silva, whose country will preside over BRICS throughout 2025, supported the creation of a common currency at the 2023 summit. However, shortly after Trump’s threats, Lula officially dropped the idea of a common currency from Brazil’s 2025 BRICS presidency agenda, instead sticking to the previously announced plans for trade in local currencies. While a common currency has never reached the implementation stage, the threat of a U.S. “counterattack” has successfully deterred BRICS members from pursuing the idea. The possibility of a harsh U.S. response—whether through tariffs, sanctions, or some other form of political pressure—puts current de-dollarization efforts in a highly fragile position.

 

A Local Currency Monitoring and Analysis Unit

Another serious problem for BRICS stems from the political nature of the organization. First, BRICS is envisioned as a group where no one is above the others. As a critic of the current global governance system, BRICS is dedicated to preserving sovereignty and independence. That means no state can be forced to obey decisions it has not agreed to, and no supranational body can intervene in a state’s internal affairs. Decision-making is based on consensus, and while this promotes democratic elements, it lacks real authority. Without a structured decision-making mechanism, the group struggles to establish itself as a unified actor on the global stage. Instead, members primarily promote the use of local currencies through bilateral agreements.

 

The second challenge is the diversity of its members. BRICS states exist along a spectrum—from anti-Western countries like Russia and Iran to neutral players like India and Brazil, with China somewhere in between. This creates an uneven push for de-dollarization.

 

For these two reasons, BRICS is—at least for now—unlikely to present a stable alternative to the dollar-led system. Despite the decline of the rules-based order and the promotion of local currencies through BRICS institutions and declarations, broader de-dollarization often appears more like an informal agenda championed by the bloc’s anti-Western members. Nevertheless, BRICS holds potential as an alternative, primarily due to its size and influence in emerging markets. To realize this potential, reforms would be necessary to help the group develop viable pathways toward its global aspirations. The question is, how might BRICS reform itself?

 

Shifting to a majority-based decision-making process would directly violate the organization’s very foundation. An alternative approach could be to create a more transparent and structured commitment to de-dollarization. One way to achieve this would be to establish a new working unit within existing BRICS institutions to monitor and analyze members’ trade in local currencies.

 

This Local Currency Monitoring and Analysis Unit would serve as an institutional body systematically collecting, analyzing, and reporting data on member states’ use of local currencies in trade, investment, and financial transactions. Data collection would occur through cooperation with BRICS members’ central banks, finance ministries, and trade bodies. The analysis would track each member state’s progress, revealing which BRICS countries are actively advancing local currency usage and which are lagging behind. It would also monitor major local-currency transactions and identify sector trends.

 

The unit would publish accurate, up-to-date annual reports on de-dollarization trends at BRICS summits. This unit could also serve as a valuable resource for the NDB’s projects, which are already financed in local currencies. For these reasons, it would not be merely a statistical research body but would also have a practical role as a policy support group for the NDB’s investment strategies.

 

Beyond this, the broader goal would be to enhance coordination of national de-dollarization strategies at the intragovernmental level. This unit could provide a boost for BRICS, making its de-dollarization process more credible and transparent, while maintaining its core values. In doing so, the group would take the first steps in transforming its currently fragmented de-dollarization efforts into a coherent and organized strategy.

 

While the dollar still offers certain advantages for many countries, the de-dollarization process is already underway, and BRICS has the opportunity to expand its role further.

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